Mays Research 2007

Research

Mays Business School 2007

M a y s B u s i n e s s S c h o o l f a c u l t y m e m b e r s a r e a t t h e fo r e f r o n t of idea development and research

Table of contents Themed research Services marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 International business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Organizational behavior. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Capital markets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Technology acceptance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Departmental research Department of Accounting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Department of Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Department of Information and Operations Management. . . . . . 25 Department of Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Department of Marketing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Collaborative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Economic growth has long been of vital importance to the success of our country. The factors that drive growth, in turn, are fluid and dynamic in nature. It is critical that business schools continuously provide insights and address issues that are of the most interest to business and to managers.

Among the key areas of attention in today’s competitive business world are services marketing, international business, human behavior at work, capital market dynamics, and technology adoption. As you will see in this report, Mays Business School faculty members are at the forefront of idea development and research in these areas. Of course, our faculty members are actively engaged with numerous other important research areas as well.

Conducting important research and publishing the findings in appropriate journals is an important part of the work of Mays faculty members. The research process enables us to remain current in our respective academic fields, improves our teaching through the dissemination of the latest knowledge, and helps provide insights into some of the most important economic and social business decisions facing managers both today and tomorrow. To learn more about our ongoing research at Mays, visit our Web site at mays.tamu.edu/research.

Ricky W. Griffin Interim Dean

Services marketing A service organization creates value for customers through performances (services).

All organizations do this, some exclusively through services such as transportation and entertainment companies, and some through a combination of goods and services, such as manufacturers, distributors, and retailers. Even companies that only market manufactured goods use numerous services to facilitate their sale, such as field sales, customer education, credit, delivery and product repair.

Leonard L. Berry Distinguished Professor of Marketing M.B. Zale Chair in Retailing and Marketing Leadership

Every organization’s future depends on the quality of its service.

If every organization is a service organization, it follows that every organization’s future depends on the quality of service it provides to its customers. Poor quality of service means poor value for customers, which, inevitably, means fewer customers. I ask my students on the first day of class if they can think of any exceptions to my claim that every organization’s future depends on the quality of its service. A few students will try. The U.S. Postal Service often gets mentioned, but the truth is that it has lost considerable business to UPS, FedEx, and many other competitors, including online services.

Students leave class on the first day with an understanding that quality service is a critical success factor for all organizations. Regardless of where their careers may take them, they need to be quality service champions if they are going to be effective executives.

Students also learn on the first day that low price is not the equivalent of high value.

Price is part of value, but it is not the same thing. To the customer, value is what the customer expects to receive from a company (benefits) and what the customer will have to endure to get them (burdens). Burdens are both monetary (the price) and non-monetary—for example, an inconvenient location, limited parking, or unhelpful or rude staff. Companies strengthen their value proposition by either improving benefits, reducing burdens or ideally doing both. Delivering a high quality of service helps an organization do both.

It is no surprise that the role of quality service in customer value creation shows up in most of the faculty publications highlighted in this section. Berry, Parish, and their coauthors identify a set of ideal physician behaviors based on research conducted at Mayo Clinic in which patients were asked in interviews to describe their best and worst experiences with a Mayo doctor. Keblis demonstrates the application of mathematical programming to appropriately size customer contact centers at Amazon.com to improve service levels while reducing costs. Hitt and Bierman examine the importance of human and relational capital on the internationalization of professional service firms and find that they have a positive effect.

Peter Drucker popularized the phrase “The customer is the business.” It is such a simple and powerful statement. Without customers there is no potential revenue.

Without revenue there can be no profit. Without the potential for profit, there is no incentive to risk investing in a business. Without investment, there is no business.

Quality service helps companies attract more new customers, do more business with existing customers, and reduce the loss of customers. Every organization’s future depends on the quality of its service. Just ask my students.

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Mays Business School at Texas A&M University

Services marketing

of the business-marketing arena is reaffirmed by arguing that it is not simply a field of inquiry, but a perspective that helps legitimately align the academic world to the business world and ensures relevance and rigor in everything people do as marketing professors. Some of the indigenous hallmarks of a business marketing outlook are: the motivation for all interactions are to serve professionally as opposed to personally motivated arenas, a high degree of mutual dependence among the parties to a relationship, and the sharing of rewards, responsibilities and value creation across any dyad. Effectively applying business-marketing characteristics will result in the long-term enhancement of scholarly research productivity and education within the marketing discipline and business school.

Michael A. Hitt and Leonard Bierman, Department of Management “The Importance of Resources in the Internationalization of Professional Service Firms: The Good, the Bad and the Ugly” Academy of Management Journal, December 2006 With Klaus Uhlenbruck, Katsuhiko Shimizu

To further knowledge about the bases of internationalization, we examined the importance of two firm resources: human capital and relational capital derived from relations with corporate clients and foreign governments. The results show that human and relational capital generally had a positive effect on internationalization; however, corporate client relational capital was only positive when teamed with strong human capital. Additionally, human capital positively moderated the relationship between internationalization and firm performance, but neither form of relational capital moderated that relationship. Although corporate client relational capital had a strong, positive effect on firm performance, foreign government relational capital had a negative effect on performance.

Matthew F. Keblis, Department of Information and Operations Management “Improving Customer Service at Amazon.com” Interfaces, September 2006 With Mamao Chen

The success of the Internet retailer Amazon.com depends on its providing high-quality customer service. Amazon.com’s customer service operations consist of internally and externally managed contact centers. Amazon.com must size its contact centers appropriately, deciding about hiring and training at internally managed centers, and the volume of voice calls and e-mail messages to allocate to external service providers. We developed an approach based on mathematical programming that Amazon.com uses in planning capacity, reducing the average cost of handling a customer contact, and increasing the service level provided to customers.

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Mays Business School at Texas A&M University

Rajan Varadarajan and Paul S. Busch, Department of Marketing “Brand Portfolio, Corporate Image and Reputation: Managing Brand Deletions” Journal of the Academy of Marketing Science, April 2006 With Mark P. Defanti

Brand portfolio management addresses, among other issues, the interrelated questions of what brands to add, retain, or delete. A small number of brands in a firm’s brand portfolio can often have a disproportionately large positive or negative impact on its image and reputation and the responses of stakeholders.

Brand deletions can be critical from the standpoint of a firm being able to free up resources to redeploy toward enhancing the competitive standing and financial performance of brands in its portfolio with the greatest potential to positively affect its image and reputation. Against this backdrop, the authors focus on the organizational and environmental drivers of brand deletion propensity, the predisposition of a firm to delete a particular brand from its brand portfolio. The authors propose a conceptual model delineating the drivers of brand deletion propensity and suggest directions for future research, including the related concept of brand deletion intensity.

Rajan Varadarajan, Department of Marketing “CRM Implementation: Effectiveness Issues and Insights” Journal of Service Research, November 2006 With Timothy Bohling, Douglas Bowman, Steve LaValle, Vikas Mittal, Das Narayandas, Girish Ramani

Conceptually, customer relationship management (CRM) has been widely embraced by businesses. In practice, however, examples of success contrast with anecdotes where the diffusion of CRM into organizations continues to be a slow process and/ or where CRM implementation outcomes have fallen short of expectations. Successful implementation depends on a number of factors, such as fit between a firm’s CRM strategy and broader marketing strategy, and intra-organizational and interorganizational cooperation and coordination among entities involved in implementation. Building on the results of a survey of the CRM-implementation-related experiences of 101 U.S.based firms, in this article the authors identify factors associated with successful implementation and advance directions for future research.

Journ al A rticles Leonard L. Berry, Department of Marketing “Regaining the Health of a Nation: What Business Can Do About Obesity” Organizational Dynamics, Fall 2006 With Kathleen Seiders, Albert C. Hergenroeder

Obesity is a controversial and sometimes divisive social reality. It is controversial because of stark differences in opinion as to what is causing widespread obesity and what should be done about it. It can be divisive because the issues and options have strong economic and cultural implications that trigger fervent emotions. Recent unprecedented attention in the media has created greater public awareness of the growth, causes and consequences of obesity. The business community has not been a major presence or fared well in the public dialogue and debate on obesity, with food and beverage companies in particular subjected to criticism and calls for increased regulation. In this article, we discuss the important, positive role that business can and should play concerning obesity. We argue that companies’ proactive involvement makes business sense and social sense, and that business can offer meaningful interventions that are unlikely to come from any other source.

Leonard L. Berry, Department of Marketing “Service Clues and Customer Assessment of the Service Experience: Lessons from Marketing” Academy of Management Perspectives, May 2006 With Eileen A. Wall, Lewis P. Carbone

Because customers’ assessment of services is based on performances rather than objects, they rely on the numerous clues that are embedded in performance when choosing services and evaluating service experiences. Indeed, it is often small clues that influence a customer’s overall perception of an experience.

Customers form perceptions based on the technical performance of the service (functional clues), the tangibles associated with the service (mechanic clues), and the behavior and appearance of service providers (humanic clues). Functional, mechanic, and humanic clues play specific roles in creating the customer’s service experience, influencing both rational and emotional perceptions of service quality. Clearly and consistently designing and orchestrating clues is a critical management responsibility; businesses need to be “clue conscious” and add “clue management” to their job descriptions.

Leonard L. Berry and Ann M. Mirabito, Department of Marketing “A Physician’s Agenda for Partnering with Employers and Insurers: Fresh Ideas” Mayo Clinic Proceedings, December 2006 With Sankey Williams, Frank F. Davidoff

We report the results of the second phase of a multiphase qualitative investigation of the ways physicians, employers and insurers can work together more effectively to provide better ambulatory care to employees and their dependents. This article

focuses on ways physicians can develop more useful relationships among these groups. We used a grounded theory approach to conduct 71 interviews from August 2004 to December 2005, with 25 practicing physicians in large and small groups, urban and rural areas, private and academic settings, and primary care and specialty practices; 33 hospital administrators, medical association executives, health insurance medical officers and health policy analysts; and 13 senior executives of large and small companies. The study identifies two approaches to the structuring of ambulatory care that can lead to improved health care outcomes and value.

Leonard L. Berry and Janet T. Parish, Department of Marketing “Patients’ Perspectives on Ideal Physician Behaviors” Mayo Clinic Proceedings, March 2006 With Neeli M. Bendapudi, Keith A. Fry, William L. Rayburn

The authors incorporate the views of patients to develop a comprehensive set of “ideal” physician behaviors. Phone interviews were conducted in 2001 and 2002 with a random sample of 192 patients who were seen in 14 different medical specialties of the Arizona and Minnesota campuses of the Mayo Clinic. Interviews focused on the doctor-patient relationship and lasted between 20 and 50 minutes. Patients were asked to describe their best and worst experiences with a doctor in the Mayo system and to give specifics of the encounter. The interviewers independently generated and validated seven ideal behavioral themes that emerged from the interview transcripts.

The ideal physician is confident, empathetic, humane, personal, forthright, respectful and thorough. Ways that physicians can incorporate “clues” of the seven ideal physician behaviors to create positive relationships with patients are suggested.

Leonard L. Berry, Venkatesh Shankar, Janet T. Parish, Susan V. Cadwallader, Thomas Dotzel, Department of Marketing “Creating New Markets Through Service Innovation” Sloan Management Review, Winter 2006

Many companies make incremental improvements to their service offerings, but few succeed in creating service innovations that generate new markets or reshape existing ones.

To move in that direction, executives must understand the different types of market-creating service innovations as well as the nine factors that enable these innovations.

Paul S. Busch, Department of Marketing “We Are All Business Marketers Now” Journal of Business & Industrial Marketing, 2006 With D avid J. Lichtenthal, Iyer R. Gopalkrishnan, Thomas Tellefsen

This paper argues that a business-marketing outlook is a lucid perspective for enhancing the value of business school faculty services provision and administration. The importance 3

BOOKS & BOOK CH A P T ERS Rajan Varadarajan, Department of Marketing “Customers as Co-Producers: Implications for Marketing Strategy Effectiveness and Marketing Operations Efficiency�

Chapter in The Service Dominant Logic of Marketing: Dialog, Debate, and Directions, eds R.F. Lusch, S.L. Vargo. M.E. Sharpe, Amonk, New York: 2006.

With Kartik Kalaignanam

In a growing number of industries, customers are encouraged by firms to become more involved in the co-production of products, as well as in other realms, such as innovation and supply chain management. In this chapter, we explore (1) the relationship between product, market and customer, and firm characteristics and customer involvement with the firm in various activities spanning the value chain and (2) the catalytic effect of advances in communication technology, information technology and self-service technology on these relationships. The implications of customer involvement for marketing strategy effectiveness and marketing operations efficiency, and directions for future research are highlighted.

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International business Faculty at Mays Business School have a long history of engaging in research on international business topics. Such work has been actively encouraged and supported by Mays’ Center for International Business Education and Research.

Faculty and PhD students at Mays have presented and published research ranging the full span from an individual working for a multinational enterprise to national institutions in the global economy.

Kirkman and Kim focus on the individual, developing a conceptual model exploring the cultural intelligence of expatriates sent overseas by their multinational parent firms. They argue that cultural distance between the home and host countries is important for determining the needed cultural intelligence, the degree of crosscultural adjustment, and expat assignment performance. Webb, Tihanyi and Ireland discuss how employee identities can help to create patterns of cooperation and competition within multinational enterprises and how these patterns bind the enterprise’s strategy to its organizational structure.

Lorraine A. Eden Professor of Management

Mays faculty bring their expertise into the classroom, sharing their knowledge of global business with the next generation of business leaders.

The majority of international business research at Mays is at the level of the firm.

Scholars want to “open the black box” and explore firm strategies and structures, and link these to firm performance. Over the past year, Mays researchers have explored general topics in firm strategy including international entrepreneurship and international diversification (the depth and breadth of international activities of the firm). An important country focus is emerging market economies. For example, Ireland and Webb argue that the strategic challenge for the entrepreneurial firm in an emerging market country is to balance the allocation of the firm’s resource bundle between opportunity-seeking and advantage-seeking behaviors. Zhu, Hitt and Tihanyi find that entrepreneurial start-ups identify, create, and exploit new opportunities continuously in foreign markets. Their paper contributes to knowledge of how incumbent small and medium-sized firms and entrepreneurial ventures in emerging markets build knowledge and capabilities to enter and compete successfully in international markets.

When we move to the country level of analysis, we find Mays faculty working on important topics such as comparing accounting standards, understanding countrylevel institutions, and developing new forms of international money. Wang and Smith compare U.S. and non-U.S. GAAP standards with the new International Financial Reporting Standard (IFRS) and find clear differences between GAAP and IFRS in terms of market valuation. Hitt and colleagues are building composite indexes that can compare the similarities and differences of national institutional environments.

Kolari is engaged in a project that would create a new composite currency to avoid exchange rate risk. For example, if a U.S. stock fell by 10 percent over the year, the drop could be because the U.S. dollar fell or the stock value fell. With Kolari’s “world money,” the investor could determine how much of the decline in stock value was due to the fall in the dollar, and how much was due to stock value declining.

At all levels of analysis (micro, macro and global), Mays international business researchers are world-class entrepreneurs. Their work is published in the top academic journals and discussed at leading conferences around the world. Mays faculty are equally comfortable consulting with global multinationals and small entrepreneurial startups. Lastly, doing what Mays faculty do best, they bring their expertise into the classroom, sharing their knowledge of global business with the next generation of business leaders.

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Mays Business School at Texas A&M University

Journ al articles Lorraine A. Eden, Department of Management “The Impact of Corruption on Entry Strategy: Evidence from Telecommunication Projects in Emerging Economies” Organization Science, May 2006 With Klaus Uhlenbruck, Peter Rodriguez, Jonathan Doh

With globalization and the growth in emerging economies, multinational enterprises (MNEs) now frequently confront challenges associated with corrupt governments. Already, a growing body of research has demonstrated that corruption significantly reduces a country’s aggregate inflows of foreign direct investment through its effects on firm performance. We move the analysis of corruption from aggregate financial flows toward managerial theory and practice by examining how firms adjust their strategy for entering foreign markets in corrupt environments and how different types of corruption affect firms’ choices. Building on institutional theory, we predict that MNEs will respond to pervasive and arbitrary corruption in a host country by selecting particular types of equity and nonequity modes of entry. Using data on 220 telecommunications development projects in 64 emerging economies, we find that firms adapt to the pressures of corruption via short-term contracting and entry into joint ventures. We also find that the arbitrariness surrounding corrupt transactions has a significant impact on firms’ decisions, in addition to the overall level of corruption. In contrast to extant research, we show that MNEs use nonequityentry modes or partnering as an adaptive strategy to participate in markets despite the presence of corruption.

less beneficial in high density environments. Strategic conformity enhances performance in low density environments, but adversely affects performance in high density environments.

Lorraine A. Eden, Department of Management “Focused Issue: Three Lenses on the Multinational Enterprise: Politics, Corruption and Corporate Social Responsibility” Journal of International Business Studies, November 2006 With Amy Hillman, Peter Rodriguez, Donald S. Siegel

Scholars who analyze multinational enterprises (MNEs) recognize the complex relationship between international business (IB) and society. However, compared with other IB topics, research on politics, corruption and corporate social responsibility—‘three lenses’ on the MNE—remains somewhat embryonic, with unresolved issues regarding frameworks, measurement, methods and theory. This presents unique opportunities for integration and extension of disciplinary perspectives, which we explore in this article. We provide an introduction to potential linkages across these three lenses, an agenda for additional theoretical and empirical research, and a review of the papers in the journal’s focused issue.

Lorraine A. Eden, Department of Management “Went for Cost, Priced at Cost? An Economic Approach to the Transfer Pricing of Offshored Business Services” Tax Management Transfer Pricing Report, February 2006

Introductory essay to focused issue, “Three Lenses on the Multinational Enterprise.”

What are the implications of the rapid growth in offshored business services for transfer pricing—the pricing of products traded between affiliated firms? I explore these implications through a case study of transnational corporations in the teleservices industry. Teleservices firms own foreign affiliates that provide inbound and outbound call services to third party clients. Economic analysis, applied to the facts and circumstances of the industry, is used to develop pricing rules for offshored call centers, including the implications for location savings. Even though the catchphrase “Went for cost, stayed for quality” does apply to teleservices as it does in other offshored business services, I conclude that “Went for cost, priced at cost” is the appropriate transfer-pricing maxim for tax authorities and firms to follow.

Lorraine A. Eden, Department of Management

Michael A. Hitt, Department of Management

“Local Density and Foreign Subsidiary Performance” Academy of Management Journal, April 2006 With Stewart R. Miller

“Culture, Institutions and International Strategy” Journal of International Management, 2006 With V. Franklin, H. Zhu

Local density (the number of firms vying for similar resources in a local environment) has been overlooked in explaining foreign subsidiary performance. This study draws upon the literatures on liability of foreignness and density dependence to examine how local density within the host country affects performance, both directly and indirectly through its effects on market experience and strategic conformity. We find that local density is negatively related to foreign subsidiary performance, and that market experience is

The purpose of this paper is to examine the importance of national culture to international strategy. To do so, we first examine the interrelationship between culture and institutions.

Following, we explore the effects of institutional environments on international strategies chosen. We continue with a discussion of the selection of markets entered, the mode of market entry, and how knowledge and learning drive these activities. Finally, we examine in more depth the importance of emerging markets to current and future international strategies

Lorraine A. Eden, Department of Management “Introduction to ‘Three Lenses on the Multinational Enterprise: Politics, Corruption and Corporate Social Responsibility’” Journal of International Business Studies, November 2006 With Amy Hillman, Peter Rodriguez, Donald S. Siegel

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International business

and the geographic clustering of international activities. The research is based on a review of slightly less than 500 articles published in the Journal of International Business Studies, Journal of International Management and Strategic Management Journal for the period of 2000 to 2005.

Michael A. Hitt, Laszlo Tihanyi and Hong Zhu, Department of Management “The Internationalization of SMEs in Emerging Economies: Institutional Embeddedness and Absorptive Capacities” Journal of Small Business Strategy, 2006

We examine the importance of institutional embeddedness and dynamic capabilities in the internationalization strategies of small and medium-sized enterprises (SMEs) in emerging economies. We focus on two types of SMEs—incumbent SMEs and entrepreneurial start-ups. We argue that incumbent SMEs can increase their internationalization capabilities by using their embedded networks with local governments and business groups. Entrepreneurial start-ups in emerging economies may develop new capabilities by learning from foreign firms and business groups. Therefore, entrepreneurial start-ups identify, create and exploit new opportunities continuously in foreign markets. This work contributes to our knowledge of how incumbent SMEs and entrepreneurial ventures in emerging markets build knowledge and capabilities to enter and compete successfully in international markets.

Michael A. Hitt, Laszlo Tihanyi, Toyah Miller, Brian Connelly, Department of Management “International Diversification: Antecedents, Outcomes and Moderators” Journal of Management, December 2006

Pursuit of international markets and resources from foreign sources has increased dramatically during the past two decades, and the academic study of international diversification has increased concurrently. Reviewing the literature in management and related disciplines, the authors discuss recent findings of research on international diversification. A conceptual model groups key relationships, including antecedents, environmental factors, performance and process outcomes, moderators, and the characteristics of international diversification. The authors synthesize intellectual contributions, highlight unresolved issues, and provide recommendations for future research.

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Mays Business School at Texas A&M University

Bradley L. Kirkman, Department of Management “A Quarter Century of Culture’s Consequences: A Review of Empirical Research Incorporating Hofstede’s Cultural Value Framework” Journal of International Business Studies, 2006 With Kevin Lowe, Cristina Gibson

Since Geert Hofstede’s Culture’s Consequences: International Differences in Work-Related Values (Sage, 1980a) was published, researchers have utilized Hofstede’s cultural values framework in a wide variety of empirical studies. We review 180 studies published in 40 business and psychology journals and two international annual volumes between 1980 and June 2002 to consolidate what is empirically verifiable about Hofstede’s cultural values framework. We discuss limitations in the Hofstede-inspired research and make recommendations for researchers who use Hofstede’s framework in the future.

BOOKS & BOOK CHAP TERS Lorraine A. Eden, Department of Management “Cave! Hic Dragones! Alan M. Rugman’s Contributions to the Field of International Business” Chapter in Internalization, International Diversification and the Multinational Enterprise: Essays in Honor of Alan M. Rugman. Research in Global Strategic Management, Volume 11, Eds. Alain Verbeke, Daniel Van Den Bulcke, Elsevier, Amsterdam, The Netherlands: 2006

Alan Rugman is one of the world’s leading scholars of international business, with more books and articles in top journals than almost anyone else in the Academy of International Business. In this chapter, I examine Rugman’s contributions to international business theory in two areas: first, his role in building the theory of internationalization of a multinational enterprise, and second, bridging the gap between internationalization theory and strategic management.

Lorraine A. Eden, Department of Management “Multinational Corporations Through the Uneven Development Lens” Chapter in Multinational Corporations and Global Poverty Reduction, Eds. Subhash C. Jain, Sushil Vachani, Edward Elgar Publishing, Cheltenham, U.K.: 2006 With Doug Schuler, Stefanie Lenway

Much popular rhetoric has bestowed this age as the triumph of capitalism over the command-and-control socialist economies (Friedman, 1999). This liberal brand of international capitalism, with open trade, private enterprise and global enterprise through multinationals and the like, has coincided with massive increases in trade and investment lows, national growth and national incomes (World Bank, 2000). Still, while the world’s nations become richer, billions of people are left behind. Will this trend continue? Do multinational corporations add to, or decrease, the poverty and income inequality experienced by many citizens of rich and poor countries alike? Our chapter looks at some recent trends in international business.

Lorraine A. Eden, Department of Management

Bradley L. Kirkman and Gilad Chen,

“Transfer Prices and Import and Export Price Indexes: Theory and Practice” Chapter in Price and Productivity Measurement, Volumes 1 and 2, Eds. W. Erwin Diewert, Bert M. Balk, Dennis Fixler, Kevin J. Fox, Alice O. Nakamura, Trafford Press, Victoria, Canada: 2006 With W. Erwin Diewert, William Alterman

Department of Management “A Multi-Level and Cross-Cultural Examination of Transformational Leadership in the U.S. and China” With Zhen Xiong Chen, Kevin Lowe Presented at the 2006 Academy of Management meeting in Atlanta, Georgia

This chapter presents the theoretical concepts for various types of transfer. Then in the later sections of the chapter, practical methods for estimating transfer prices are discussed.

Conference papers Lorraine A. Eden, Department of Management “Multinationals and the New Regionalism in the Americas” Presented at the 2006 Inter-American Development Bank Conference, “The New Regionalism Progress, Setbacks and Challenges” in Washington, D.C.

Lorraine A. Eden and Michael A. Hitt, Department of Management “Ethnic Identity, Market Depth and the Survival of Emerging Market Firms in Developed Markets” With S.R. Miller, D.E. Thomas Presented at the 2006 International Management Division of Academy of Management in Hawaii

Michael A. Hitt, R. Michael Holmes, Toyah Miller, Department of Management

Bradley L. Kirkman, Department of Management “Cultural Intelligence and International Assignment Effectiveness” With Harry Kim Presented at the 2006 Academy of Management annual meeting in Atlanta, Georgia

James W. Kolari, Department of Finance “Meta-Money: Theory” With N ickolai V. Hovanov, S.F. Sutyrin, Mikhail V. Sokolov Presented at 2006 conference proceedings of the International Scientific School: Modeling and Analysis of Safety and Risk in Complex Systems in St. Petersburg, Russia

L. Murphy Smith and Kun Wang, Department of Accounting “A Comparison of the Performance of Valuation Models: Evidence from China-Based Firms Cross-listed in the U.S.” Presented at the 2006 American Accounting Association Southwest Region’s annual meeting in Oklahoma City, Oklahoma

“Modeling Country Institutional Profiles: The Dimensions and Dynamics of Institutional Environments” With M.P. Salmador Presented at the 2006 Strategic Management Society Conference in Vienna, Austria

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Organizational behavior Organizational behavior encompasses many different topics. The general focus of the discipline is the study of human behavior, attitudes, processes and performance in organizations. Given the breadth of the discipline, it is perhaps not surprising that Mays faculty from varying backgrounds and perspectives housed in different departments study issues falling under the general organizational behavior umbrella.

This, of course, makes the study of such behavioral phenomena quite interesting, allowing our faculty to contribute knowledge to improved organizational functioning. In this section, I highlight some of the related research recently conducted by Mays faculty. Given the breadth of the topic as well as the productivity of our scholars, this is only a snap shot of the current state of Mays faculty organizational behavior research.

Wendy R. Boswell Associate Professor of Management Mays Research Fellow

The general focus of the discipline is the study of human behavior, attitudes, processes and performance in organizations.

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One common theme in this research is organizational justice (i.e., fairness). The factors that lead to justice and fairness perceptions as well as how to better manage such perceptions remain key organizational challenges, particularly given the strong link between justice and important work outcomes such as employee retention, motivation, and legal claims. Mays research focuses on how others are treated (i.e., social comparisons) in forming justice perceptions (Umphress), pay systems (Paetzold, Zardkhoohi, & Wesson), and organizational citizenship behavior such as going “above and beyond” (Kirkman). Related to the general area of justice at work is how individuals voice their discontent through dispute resolution systems (Boswell).

A related topic area in which Mays faculty members are contributing great insight is diversity and discrimination. Studies have examined how gender and race differences (or similarities) relate to attraction to an organization (Umphress, Boswell) and ensuing work-related attitudes and perceptions (Paetzold, Whitten). Work-life conflict is also quite relevant to gender issues at work. Recent research in this area examines the integration and segmentation of work and non-work roles (Boswell), the role of communication technologies such as cell phones in work-life conflict (Boswell), and issues surrounding the accounting profession specifically (Smith).

The increasingly diverse and changing nature of our workforce reinforces the value of research aimed at understanding the challenges and best practices of workplace diversity and balancing work-family demands.

One final area to highlight is the more “macro” aspect of Mays faculty organizational research. Numerous scholars have studied the importance of individuals to a firm’s effectiveness and strategic success (Hitt, Boswell, Whitten). Such studies bridge micro (individuals) and macro (firms) issues and are quite reflective of the value that an eclectic group of scholars such as at Mays can offer. Group- and team-level research is perhaps a middle ground between the study of individual behavior and organizational outcomes. Mays scholars are contributing insight in this area as well, examining how to enhance the effectiveness of work teams (Kirkman, Porter, Wesson).

Managing individual behavior is a critical challenge for every organization, and Mays faculty is offering theoretically rich and practically relevant insight to the knowledgebase in this area.

Mays Business School at Texas A&M University

Journ al articles Wendy R. Boswell, Department of Management “Aligning Employees Through ‘Line of Sight’” Business Horizons, November 2006 With John B. Bingham, Alexander J.S. Colvin

Aligning employees with the firm’s larger strategic goals is critical if organizations hope to manage their human capital effectively and ultimately attain strategic success. An important component of attaining and sustaining this alignment is for employees to have a “line of sight” with their organization’s strategic objectives. In this article, we illustrate how the translation of calculated firm goals into tangible results requires that employees not only understand the organization’s strategy, but also accurately appreciate what actions are aligned with realizing that strategy.

Gilad Chen, Department of Management “Toward a Systems Theory of Motivated Behavior in Work Teams” Research in Organizational Behavior, July 2006 With Ruth Kanfer

Work motivation theories and research have tended to focus either on individual motivation, ignoring contextual influences of team processes on individuals—or on team motivation, ignoring individual differences within the team. Redressing these limited, single-level views of motivation, we delineate a theoretical multilevel model of motivated behavior in teams. First, we conceptualize motivational processes at both the individual and team levels, highlighting the functional similarities in these processes across levels of analysis. We then delineate a set of theoretical propositions regarding the cross-level interplay between individual and team motivation, and antecedents and outcomes of individual and team motivation. Finally, we discuss the implications of our theoretical model for future research and managerial practices.

Wendy R. Boswell, Department of Management “Blurring Boundaries: Correlates of Integration and Segmentation Between Work and Non-work” Journal of Vocational Behavior, June 2006 With Julie Olson-Buchanan

This study investigates the interrelations among role integration–segmentation, role identification, reactions to interruptions, and work–life conflict. Results from a field survey of university employees suggest that as highly identified roles are integrated into other domains, high role integration is related to less negative reactions to interruptions, and employees who integrate work into non-work set fewer boundaries for using communication technologies during non-work time and report higher work–life conflict. Findings provide insight into how individuals integrate their work and life domains and the consequences of such integration to work–life conflict.

Wendy R. Boswell, Department of Management “The Role of Personality, Situational, and Demographic Variables in Predicting Job Search among European Managers” Personality and Individual Differences, March 2006 With Mark V. Roehling, John W. Boudreau

This research investigates predictors of job search activity among high-level European managers. We examined the role of personality in predicting job search over and above the effects of situational and demographic variables. Results found that the personality traits extraversion and neuroticism predicted job search, and the effects were found in the presence of situational and demographic variables shown in prior research as particularly important determinants of job search activity.

Ramona L. Paetzold, Department of Management “Effects of Dyad Demographic Diversity on the Job Satisfaction Experienced by Assistant Coaches” International Journal of Sport Management, 2006 With Michael Sagas, George Cunningham

This article examines the effect of gender diversity coaching dyads on the job satisfaction of assistant coaches. Relational demography is used to assess the differential effects of dyadic diversity for men and women assistant coaches. As expected, when female assistant coaches are paired with male coaches, they are generally less satisfied with their jobs and indicate a greater willingness to give up their coaching jobs. Male assistant coaches paired with male coaches do not tend to reveal this lack of satisfaction with their jobs.

Ramona L. Paetzold and Ricky W. Griffin, Department of Management “Workplace Violence, Employer Liability, and Implications for Organizational Research” Journal of Management Inquiry, 2006

Organizations face potential liability whenever workplace violence occurs inside their boundaries. Focusing on violent behaviors between employees, we examine the major legal theories that apply most often in the workplace violence scenarios—negligence (state law), sexual harassment law (federal law), and the Americans with Disabilities Act (federal law). Our purpose is to highlight avenues for organizational research that arise because of the legal issues that employers face. For each source of liability, we identify major research questions that should be studied in organizational science, particularly by aggression and violence researchers.

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Organizational behavior

Abbie J. Shipp, Department of Management “The Phenomenology of Fit: Linking the Person and Environment to the Subjective Experience of PersonEnvironment Fit” Journal of Applied Psychology, July 2006 With Jeffrey R. Edwards, Daniel M. Cable, Ian O. Williamson, Lisa Schurer Lambert

This study investigated the meaning and relationships among the atomistic, molecular and molar approaches to person-environment fit and examined factors that influence the strength of these relationships. Results showed that the relationships among the approaches deviate markedly from the theoretical logic that links them together. Supplemental analyses indicated that molar fit overlaps with affect and molecular fit gives different weight to atomistic person and environment information, depending on how the comparison is framed. These findings challenge fundamental assumptions underlying person-environment fit theories and have important implications for future research.

Elizabeth E. Umphress, Department of Management “When Birds of a Feather Flock Together and When They Do Not: Demographic Similarity, Social Dominance Orientation, and Organizational Attractiveness” Journal of Applied Psychology, 2006 With Kristin Smith-Crowe, Arthur Brief, Joerg Dietz, Marla Baskerville

Although similarity-attraction notions suggest that similarity in terms of values, personality and demography attracts, we argued that sometimes demographic similarity attracts and sometimes it repels. Based on social dominance theory (Sidanius & Pratto, 1999), we demonstrated in three studies that when prospective employees support group-based social hierarchies (i.e., are high in social dominance orientation), those in high status groups are attracted to demographic similarity within an organization, while those in low status groups are repelled by it.

Michael J. Wesson, Department of Management “Psychological Collectivism: A Measurement Validation and Linkage to Group Member Performance” Journal of Applied Psychology, 2006 With C.L. Jackson, J.A. Colquitt, C.P. Zapata-Phelan

The three studies presented here introduce a new measure of the individual difference form of collectivism. Psychological collectivism is conceptualized as a multidimensional construct with the following five facets: preference for ingroups, reliance on ingroups, concern for ingroups, acceptance of ingroup norms, and prioritization of ingroup goals. Study 1 developed and tested the new measure in a sample of consultants. Study 2 cross-validated the measure using an alumni sample of a southeastern university, assessing its convergent validity with other collectivism measures.

Study 3 linked scores on the measure to four dimensions of group member performance (task performance, citizenship behavior,

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counterproductive behavior and withdrawal behavior) in a computer software firm and assessed discriminant validity using the Big Five. The results of the studies support the construct validity of the measure and illustrate the potential value of collectivism as a predictor of group member performance.

Dwayne Whitten, Department of Information and Operations Management “The Impact of Strategic Human Resource Management on Organizational Performance” International Journal of Human Resource Management, 2006 With Green, Wu, Medlin

The impact of strategic human resource management (SHRM) on organizational performance is assessed.

Additionally, the impact of a SHRM approach on the individual performance, organizational commitment and job satisfaction levels of human resource professionals is investigated.

An organization exhibits SHRM when the human resources function is vertically aligned with the mission and objectives of the organization and horizontally integrated with other organizational functions. Data from a national sample of 269 human resource professionals from large U.S. manufacturing firms were analyzed using structural equation modeling techniques. Results indicate that top managers implementing a SHRM system can expect improved organizational performance and improved levels of individual performance, job satisfaction and organizational commitment from the organization’s human resource professionals.

Dwayne Whitten, Department of Information and Operations Management “What Men Think about Executive Women” Harvard Business Review, September 2006 With Dawn S. Carlson, K. Michele Kacmar

In general, supportive attitudes of women as executives have increased significantly since 1965. But the present research found that men tend not to acknowledge that females still face barriers for success—even though women say they still encounter them.

Since women hold fewer than 20 percent of corporate officer positions in Fortune 500 companies, and only eight of those companies have female CEOs, the authors conclude that on the likelihood of full acceptance and the necessity of exceptional performance, men’s perceptions are overly rosy.

BOOKS & BOOK CH A P T ERS Wendy R. Boswell, Department of Management “Job Search” Chapter in Encyclopedia of Industrial/ Organizational Psychology, Ed. S.G. Rogelberg, Sage Publications, Thousand Oaks, California: 2006

This chapter provides a discussion of the job search construct, defined as the specific activities through which effort and time are expended to acquire information about labor market alternatives.

Prior research and extant theoretical models on job search is briefly reviewed. I focus specifically on important methodological issues involved in studying job search, determinants of job search activity, and the various outcomes of job search.

Michael A. Hitt, Department of Management Organizational Behavior: A Strategic Approach, John Wiley & Sons, New York: 2006 With C. Chet Miller, Adrienne Colella

People are the source of bright ideas in every organization. They power the organization’s performance, competitive advantages, and long-term financial success. And when they are plugged into the firm’s strategic goals, the results can be extraordinary. By emphasizing the connection between organizational behavior and performance, Hitt, Miller, and Colella help readers understand the value of organizational behavior to today’s organizations.

Conference papers Asghar Zardkoohi, Michael A. Hitt, Leonard Bierman and A.M. Chew Department of Management “Human Factors and Financial Performance of Law Firms” Presented at the 2006 Gender & Diversity in Organizations Division of the Academy of Management’s annual meeting in Hawaii

Bradley L. Kirkman, Department of Management “Relationship Between Organizational Justice and Organizational Citizenship Behavior: The Moderating Effects of Cultural Values” With Marieke Schilpzand, Luis Martins Presented at a 2006 Southern Management Association conference in Clearwater Beach, Florida

Abbie J. Shipp, Department of Management “Resignation and Return: An Investigation of Career Boomerangs” With Benson Rosen, Stacie A. Furst Presented at a 2006 Academy of Management annual meeting in Atlanta, Georgia

L. Murphy Smith, Department of Accounting “Work-Life Balance and Gender Issues Facing the Accounting Profession” Presented at the 2006 American Accounting Association annual meeting in Washington, D.C.

Elizabeth E. Umphress, Department of Management “Identification Gone Bad: Positive Reciprocity and the Propagation of Unethical Prosocial Behaviors” With John Bingham, Marie Mitchell Presented at a 2006 Academy of Management annual meeting in Atlanta, Georgia

Elizabeth E. Umphress and Mary Triana, Department of Management “Social Comparison and Interpersonal Justice: How Others’ Interpersonal Justice Impacts Evaluations of a Supervisor” Presented at a 2006 Academy of Management annual meeting in Atlanta, Georgia

Elizabeth E. Umphress, Wendy R. Boswell and Mary Triana, Department of Management “Managing Discrimination in Selection: The Impact of Accountability and Social Dominance Orientation” With Aneika Simmons Presented at a 2006 Academy of Management annual meeting in Atlanta, Georgia

Elizabeth E. Umphress and Lily Ren, Department of Management “Unethical Ironies: The Impact of Distributive Justice on Unethical Behavior” With Celile Gogus, John Bingham Presented at a 2006 Academy of Management annual meeting in Atlanta, Georgia

Dwayne Whitten, Department of Information and Abbie J. Shipp, Department of Management “Conceptualization and Measurement of Temporal Focus: The Subjective Experience of the Past, Present, and Future” With Jeffrey R. Edwards, Lisa Schurer Lambert Presented at a 2006 Academy of Management annual meeting in Atlanta, Georgia

Operations Management “Perceptions of Women in Business Organizations in 2005” With Moore, Dawn S. Carlson Presented at 2006 American Statistical Association meetings in Seattle, Washington

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Capital markets Mays researchers have been addressing a variety of interesting issues relating to interactions between firms and capital markets—including stock market efficiency and corporate governance. This introduction briefly discusses a sample of related papers that were published in leading journals or presented at major conferences by Mays faculty in 2006.

Anwer Ahmed Associate Professor of Accounting

Mays researchers have been addressing a variety of issues relating to interactions between firms and capital markets.

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Some Mays researchers have focused on market efficiency in recent work. Ahmed, Kilic and Lobo (2006, The Accounting Review) investigate whether the investor valuation of derivatives depends upon whether derivatives are recognized in financial statements or disclosed in footnotes to financial statements. Ahmed, Kilic and Lobo find that investors do not attach sufficient weight to derivatives that are disclosed in footnotes relative to derivatives that are recognized on the balance sheet. This suggests that either there are additional costs of processing footnote information or there is some type of a cognitive limitation on investor processing of such information. The evidence supports the presumption under the recent and controversial financial accounting standard on derivatives, SFAS 133, that disclosing information on derivatives was not adequate from an investor perspective.

Myers, Myers and Skinner (2007, Journal of Accounting, Auditing & Finance) study firms that report long “strings” of consecutive increases in earnings per share. They find that 746 firms report earnings strings of at least 20 quarters since 1962, and show that this frequency is much larger than would be expected by chance.

Furthermore, they document that these firms enjoy abnormal returns that average more than 20 percent per year during the first five years of these strings. The evidence suggests that managers successfully managed earnings of these firms and investors did not see through the earnings management again because of costly information processing and/or some kind of a cognitive or functional fixation bias.

Ahmed and Schneible (2007, Journal of Corporate Finance) explore the effects of SEC’s Regulation Fair Disclosure (FD) on the quality of firms’ information environment. They find that while regulation fair disclosure has “leveled the information playing field” consistent with its intent, it has also resulted in a deterioration of information quality for small firms and high technology firms. In other words, these particular firms responded to fair disclosure by reducing the quantity or quality of information they voluntarily disclosed before FD. Interestingly, for large firms, fair disclosure did not alter the information quality differences across investors, suggesting that the selective disclosure problem that motivated FD may not have been as severe as the SEC believed.

There has also been a substantial interest in corporate governance issues from a wide variety of perspectives. Ahmed and Duellman (2007, Journal of Accounting & Economics) find that strong board governance is associated with more conservative accounting. Ahmed, Duellman and Abdel-Meguid (2006) document that firms that are economically important to their auditors and that have weak boards tend to have more aggressive (income increasing) accounting accruals. This result suggests that auditor independence is potentially compromised for economically important clients that have weak boards. Taken together, these studies reinforce the importance of good governance in U.S. firms.

Mays Business School at Texas A&M University

JOURN A L A RTICLES Anwer Shehab Ahmed, Department of Accounting “Does Recognition Versus Disclosure Matter? Evidence from Value-Relevance of Banks’ Recognized and Disclosed Derivative Financial Instruments” The Accounting Review, May 2006 With Emre Kilic, Gerald J. Lobo

We provide evidence on how investor valuation of derivative financial instruments differs depending upon whether the fair value of these instruments is recognized or disclosed. Expanded disclosures and accounting practices prior to SFAS No. 133 and mandatory recognition of derivative fair values after SFAS No. 133 provide a natural setting for comparing the valuation implications of recognized and disclosed derivative fair value information. Using a sample of banks that simultaneously hold recognized and disclosed derivatives prior to SFAS No. 133, we find that the valuation coefficients on recognized derivatives are significant whereas the valuation coefficients on disclosed derivatives are not significant. These results are consistent with the view that recognition and disclosure are not substitutes.

Our findings suggest that SFAS No. 133 has increased the transparency of derivative financial instruments.

Anwer Shehab Ahmed, Department of Accounting “Further Evidence on Analyst and Investor Mis-Weighting of Prior Period” International Journal of Accounting, January 2006 With S.M. Khalid Nainar, X. Frank Zhang

We empirically investigate three questions: (i) whether analysts and investors mis-estimate the persistence of operating cash flows, (ii) if so, is the cash flow effect distinct from the accrual effect in the sense that one effect holds after controlling for the other, and (iii) if these are distinct effects, which effect is stronger in magnitude? We find that prior period operating cash flows have a significant positive effect on forecast errors and stock returns consistent with analysts and investors underestimating the persistence of operating cash flows.

Further, we find that not only is the operating cash flow effect distinct from the accrual (more specifically the working capital accrual) effect but it is also considerably larger in magnitude.

Ekkehart Boehmer, Department of Finance “Do Institutions Receive More Favorable Allocations in IPOs with Better Long Run Market Performance?” Journal of Financial and Quantitative Analysis, December 2006 With Beatrice Boehmer, Raymond P.H. Fishe

We analyze allocations to institutional and retail investors in 441 initial public offerings (IPOs). In addition to the well known favorable first-day returns, we show that institutions also obtain more allocations in IPOs with better long-term performance. We find that initial institutional flips help predict

future returns, suggesting that at least some institutions retain valuable private information about IPO firms. Collectively, these findings illustrate the importance of aftermarket relationships between underwriters and investors and that underwriters have discretionary means to compensate IPO investors beyond first-day returns and price stabilization.

S. Trevis Certo, Department of Management “The Impact of External Ownership on Strategic Outcomes in IPO Firms” Journal of Applied Management and Entrepreneurship, 2006 With R. Roengpitya, D. Dalton, C. Dalton

This study explores the intersection of two important streams of research important to the field of entrepreneurship: equity ownership and initial public offerings (IPOs). Specifically, we report the findings of our analysis of the relationship between external equity ownership and strategic options pursued in the post-IPO period. Contrary to expectation, we found that agency theory predictions were not supported. The only supported hypothesized relationship was that between venture capital equity and seasoned equity offerings. These findings suggest that, as regards equity ownership, agency theory may be no more illuminating in the context of entrepreneurial firms than it is for larger more mature firms.

S. Trevis Certo and Richard H. Lester, Department of Management “Top Management Team Demographics, Strategy, and Financial Performance: A Meta-Analytic Review” Journal of Management Studies, June 2006 With Catherine M. Dalton, Dan R. Dalton

A considerable amount of research has investigated the linkage between top management team (TMT) characteristics and firm financial performance. Much of this research relies on demographic data. While these data are reliable and accessible, findings across studies are not consistent. Meta-analysis of several TMT indicators and firm financial performance provides modest support for direct relationships but indicates moderating influences. Further meta-analysis and a confirmatory factor analysis enrich these findings by examining potential moderating and intervening factors.

S. Trevis Certo and Richard H. Lester, Department of Management “Top Management Team Prestige and Environmental Uncertainty: An Examination of IPO Investor Valuations” Journal of Small Business Management, January 2006 With C atherine M. Dalton, Dan R. Dalton, Albert A. Cannella, Jr.

Relying on one of the more notable entrepreneurial settings, an initial public offering (IPO), this article extends prior work on top management team (TMT) characteristics. We examine 15

Capital markets

whether or not prestigious TMTs at the time of an IPO enhance organizational legitimacy and thereby provide a signal to potential investors. Because an IPO represents an entrepreneurial context characterized by high levels of uncertainty, we also consider the impact of environmental uncertainty on the TMT prestige/investor valuation relationship. We find that both an element of TMT prestige and environmental uncertainty influence investor valuations.

However, we also find that the influence of prestige does not assuage investors when analyzing IPOs in different environmental conditions.

view: in our sample, large CEO stock option grants were sometimes associated with a lower incidence of fraudulent reporting and sometimes with a greater incidence, depending upon whether CEO duality was present and whether directors also held stock options.

Joseph E. Coombs, Department of Management

We focus on the relations among inside ownership, board composition, unaffiliated block ownership, and compensation structure for a sample of firms following their IPOs. Specifically, we follow firms for up to eleven years after their IPOs and examine the full sample and subsamples of firms that survive, are acquired, or that file for bankruptcy during the sample period. We find that as CEO ownership declines, board independence, board seats held by venture capitalists, and unaffiliated block ownership increase. Our findings suggest that as inside ownership decreases alternative governance mechanisms evolve to help mitigate the resulting increase in agency costs. Interestingly, the associations between CEO ownership, the fraction of venture capital board membership, and unaffiliated block ownership exist only for firms that survive over the eleven-year sample period.

“An Examination of the Antecedents of Equity and Non-Equity Investments in U.S. Biotechnology Firms by Foreign and Domestic Corporate Partners” Journal of Business Venturing, July 2006 With Ram Mudambi, David L. Deeds

This study examines the characteristics that make start-up biotechnology firms attractive alliance partners. We distinguish between firm specific and location-specific characteristics as well as between foreign and domestic corporate partners. We present and test a longitudinal model of alliance development based on data from 64 public biotechnology firms. The results provide evidence that foreign and domestic alliance capital inflows are driven by different factors. Firm-specific factors explain minimal variance in capital inflows from foreign alliance partners; rather, locationspecific factors seem to matter more. The reverse is true for domestic alliance partners. Further, our results suggest that firm size moderates the relationship between location-specific factors and capital inflows from foreign alliance partners such that larger firms benefit more when located in technologically munificent environments.

Joseph E. Coombs, Department of Management “Do CEO Stock Options Prevent or Promote Corporate Accounting Irregularities?” Academy of Management Journal, 2006 With Joseph P. O’Connor, Richard L. Priem, K. Matthew Gilley

We contrast the conventional view that CEO stock options aid corporate governance by reducing moral hazard with the proposal that CEO stock options may subvert sound corporate governance. Views were tested in 65 matched pairs of public U.S. firms that either had or had not been discovered misreporting financial results. Our results support both the traditional perspective and our unprincipled agent

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Mays Business School at Texas A&M University

L. Paige Fields, Department of Finance, and Michael S. Wilkins, Department of Accounting “The Interaction Among Multiple Governance Mechanisms in Independent, Newly Public Firms” Journal of Corporate Finance, June 2006 With Tammy K. Berry

Mary Lea McAnally, Department of Accounting “Debt Reclassification and Capital Market Consequences” Journal of Business Finance and Accounting, September 2006 With William D. Mayew, Jeffrey D. Gramlich

We provide initial evidence on the economic consequences of a relatively large, fully disclosed, and apparently purposeful reporting decision: the balance sheet classification of short-term obligations as long-term debt in accordance with Statement of Financial Accounting Standard No. 6. We examine a sample of 1,684 American firm-year observations between the years 1989 and 2000 to determine whether reclassification is associated with debt-ratings and equity values. We find that reclassification increases the likelihood of a subsequent debtrating downgrade. We also find that market value decreases with increases in the amount reclassified, and that equity value is higher after firms cease reclassifying short-term obligations as long-term debt, compared with other firm-years in the sample.

Mary Lea McAnally and Constance Dickens Weaver, Department of Accounting “Employee Stock Option Fair-Value Estimates: Do Managerial Discretion and Incentives Explain Accuracy?” Contemporary Accounting Research, Winter 2006 With William D. Mayew, Leslie Hodder

We examine the determinants of managers’ use of discretion over employee stock option (ESO) valuation-model inputs that determine ESO fair values. Firms exercise considerable discretion over all model inputs and this discretion results in material differences in ESO fair-value estimates. Contrary to conventional wisdom, we find that a large proportion of firms exercise valueincreasing discretion. Importantly, we find that the use of discretion improves predictive accuracy for about half of our sample firms. Moreover, we find that both opportunistic and informational managerial incentives together explain the accuracy firms’ ESO fair value estimates.

L. Murphy Smith, Department of Accounting “Audit Committee Effectiveness: Did the Blue Ribbon Committee Recommendations Make a Difference?”

International Journal of Accounting, Auditing and Performance Evaluation, 2006

The current study attempts to measure the change in audit committee behavior (and presumably effectiveness) subsequent to implementing the NYSE & NASD’s Blue Ribbon Committee on Audit Committee Effectiveness’ recommendations. The results of the study indicate that audit committees did become more active, thus implying a more serious effort to monitor management of their respective companies. However, questionable accounting practices and major corporate failures of 2001 and 2002, notably Enron and Worldcom, led to federal legislation (the Sarbanes-Oxley Act) to regulate auditing and corporate financial reporting. The Blue Ribbon Committee recommendations appear to have been too little too late.

Sorin Sorescu, Department of Finance “Short Sale Constraints, Dispersion of Opinion and Overvaluation,” Journal of Financial and Quantitative Analysis, 2006 With Rodney D. Boehme, Bartley R. Danielsen

Miller (1977) hypothesizes that dispersion of investor opinion in the presence of short-sale constraints leads to stock price overvaluation. However, previous empirical tests of Miller’s hypothesis have examined the valuation effects of only one of these two necessary conditions. We examine the valuation effects of the interaction between differences of opinion and short sale constraints. We find robust evidence of significant overvaluation for stocks that are subject to both conditions simultaneously. Stocks are not systematically overvalued when either one of these two conditions is not met.

Sorin Sorescu, Department of Finance “The Cross-Section of Analyst Recommendations” Journal of Financial and Quantitative Analysis, March 2006 With Avanidhar Subrahmanyam

We analyze the relation between analyst attributes (years of experience, reputation of the analysts’ brokerage houses) and the short- and long-term price reactions to recommendations made by the analysts. We find that in the long-term, the recommendation changes of highly experienced analysts outperform those of lowexperience ones. In addition, investors appear to overreact to dramatic upgrades of low-ability analysts, and underreact to small upgrades by high-ability analysts. These results are consistent with the Griffin and Tversky (1992) argument that agents place too much emphasis on the strength of the signal (the dramatic nature of the event) and insufficient emphasis on the weight (the ability of the analyst making the recommendation). The study helps promote an understanding of the analyst industry and its interaction with the investing population.

Senyo Yawo Tse, Department of Accounting “Market Reaction to Earnings Surprise Warnings: The Incremental Role of Shareholder Litigation Risk on the Warning Effect” Journal of Accounting, Auditing and Finance, Spring 2006 With Rowland Atiase, Somchai Supattarakul

We examine the incremental effect of shareholder litigation risk on market reaction to earnings surprise warnings, i.e., “the warning effect.” Prior research examines earnings warnings by firms reporting large earnings news (at least 1 percent of share price), and finds a negative warning effect for bad news firms but no warning effect for good news firms. We find similar results for a larger sample of firms. In addition, we find negative and positive warning effects, respectively, for firms reporting small, bad and good earnings news, suggesting that the insignificant warning effect for good news firms is restricted to large earnings news. More importantly, we find that litigation risk magnifies the warning effect—for bad news firms, the warning effect is more negative for high-litigation-risk firms than for low-litigation-risk firms, but for good news firms, the warning effect is more positive for high-litigation-risk firms than for low-litigation-risk firms.

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Capital markets

Constance Dickens Weaver, Department of Accounting “Ticks and Tax: The Effects of Price Discreteness and Taxation on Ex-Dividend Day Returns” The Journal of the American Taxation Association, 2006 With C. Bryan Cloyd, Oliver Zhen Li

We examine ex-dividend day stock price behavior before and after the NYSE converted from discrete (1/16ths) to decimal pricing systems in early 2001, as well as the effect of equalizing the federal income tax rates on dividend and long-term capital gain income in May 2003. There is little agreement about whether incomplete price adjustment is caused by share price discreteness, differential taxation of dividend income relative to capital gains, or other factors. We find that ex-day abnormal returns declined significantly as a result of decimalization in 2001, and declined further in response to tax rate equalization in May 2003. Our findings support the view that both price discreteness and differential taxation affect ex-dividend day stock price behavior.

Michael S. Wilkins, Department of Accounting “The Reputational Penalty for Aggressive Accounting: Earnings Restatements and Management Turnover” The Accounting Review, January 2006 With Hemang Desai, Chris Hogan

In this paper we investigate the reputational penalties to managers of firms announcing earnings restatements. More specifically, we examine management turnover and the subsequent employment of displaced managers at firms announcing earning restatements during 1997 or 1998. We find that 60 percent of restating firms experience a turnover of at least one top manager within 24 months of the restatement compared to 35 percent among age-, size- and industrymatched firms. Moreover, the subsequent employment prospects of the displaced managers of restatement firms are poorer than those of the displaced managers of control firms.

Our results suggest that both corporate boards and the external labor market impose significant penalties on managers for violating GAAP.

Conference papers Anwer Shehab Ahmed, Department of Accounting “Accounting Conservatism and Board of Director Characteristics: An Empirical Analysis” With S. Duellman Presented at the August 2006 annual meeting of the American Accounting Association in Washington, D.C.

Anwer Shehab Ahmed, Department of Accounting “The Impact of Regulation Fair Disclosure on Investors’ Prior Information Quality - Evidence from an Analysis of Changes” With R. Schneible Presented at a February 2006 Journal of Corporate Finance Conference on Boundaries of SEC Regulation in Claremont, California

Anwer Shehab Ahmed, Department of Accounting “The Sarbanes Oxley Act, Auditor Independence and Accounting Accruals” With S. Duellman, A. Abdel-Meguid Presented at the August 2006 annual meeting of the American Accounting Association in Washington, D.C.

Michael Gallmeyer, Department of Finance “Pricing Rare Event Risk in Emerging Markets” With Stephan Dieckmann Presented at a 2006 Society of Economic Dynamics Meeting in Vancouver, Canada

L. Murphy Smith and Michael S. Drake, Department of Accounting “In the Public Interest: How the Sarbanes-Oxley Act Affected Internal Auditing and Its Relationship to External Auditing” Presented at the 2006 American Accounting Association annual meeting in Washington, D.C.

Edward P. Swanson and Anup Srivastava, Department of Accounting “Why Do Corporate Managers Misstate Financial Statements?

The Role of Option Compensation, Corporate Governance, and Other Factors” With Jap Efendi Presented at the 2006 American Accounting Association annual meeting in Washington, D.C.

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Mays Business School at Texas A&M University

Technology acceptance Organizations spend trillions of dollars each year on technologies with the goal of improving customer service, cutting costs and increasing efficiencies. While these accomplishments can be seen through the use of personal computers, RFID and ecommerce, imagine a world in which these technologies were never adopted. How much more productive are we today as a result of technology? How much cheaper and easier is it to track inventory levels today? These examples illuminate the benefits derived from acceptance of technologies.

In general, technology acceptance research has focused on the influence of perceived usefulness and perceived ease of use on intent to use certain technologies. Research completed by Mays researchers has extended this stream of research to also focus on individual traits such as playfulness and cognitive absorption (a state of deep involvement with a technology that leads to pleasure or enjoyment); and the belief of enjoyment (Wakefield and Whitten); and time pressures, perceived failure costs and perceived waiting costs (Loraas and Wolfe).

Dwayne Whitten Assistant Clinical Professor of Information and Operations Management

Technology acceptance research has also been conducted in the area of ecommerce. Ravi Sen found that buyers’ attitudes towards the price offered by their preferred online seller, their perception of online price dispersion, and their awareness of shopping agents have a significant affect on the user’s choice of online-search strategy (via search engines and/or shopping bots). An understanding of buyers’ choice of online search strategies can help an online seller to estimate its expected probability of making an online sale, optimize its online pricing, and improve its online promotional and advertising activities Mays research has also focused on the acceptance of strategies in technologyrelated areas. For instance, the decision to outsource is a major decision that organizations face today. Before making and accepting that decision, much thought must be put forth. Factors such as switching costs need to be considered due to the considerable costs that may be required when switching to a different vendor or bringing the previously outsourced activities back in-house.

Mays researchers have brought new technology acceptance insights into the boardroom and the classroom.

Other Mays researchers have worked in the area of acceptance of new teaching strategies in the technology classroom. Lin and Smith’s research has focused on utilizing a web-based accounting system to teach students accounting principles while also improving their knowledge of system design and implementation. Some of Jasperson’s research resulted in support, based on industry evidence, for an objectoriented approach to teaching systems development courses.

In sum, Mays researchers have brought new technology acceptance insights into the boardroom and the classroom. In the boardroom, our research offers new perspectives on why and how technology is accepted. Strategies derived from these perspectives can help companies cut costs and become more efficient through the use of technologies. In the classroom, our research can help to better educate tomorrow’s leaders as they prepare to effectively utilize technology themselves and in their organizations.

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Technology acceptance

Journ al articles ’Jon (Sean) Jasperson, Department of Information and Operations Management “Integrating ERD and UML Concepts When Teaching Data Modeling” Journal of Information Systems Education, Spring 2006 With Traci A. Carte, Mark E. Cornelius

In this paper, we describe a teaching approach that evolved from our experience teaching in both the traditional database and systems analysis classes as well as a number of semesters spent team-teaching an object-oriented systems development course.

Fundamentally, we argue that existing knowledge of structured systems development can and should inform our teaching processes when teaching object-oriented systems development techniques. We draw from an anecdotal industry example provided by one of our former students to illustrate the value of this approach, given our perception that there is a need in practice today to easily shift from structured to object-oriented thinking.

Bradley L. Kirkman, Department of Management “Enhancing the Transfer of Computer-Assisted Training Proficiency in Geographically-Distributed Teams” Journal of Applied Psychology, 2006 With Benson Rosen, Paul Tesluk, Cristina Gibson

We examined factors that determine whether or not knowledge gained from computer-assisted (i.e.,technology-based) team training in a geographically-distributed team (GDT) context transfers to organizational results. Specifically, we examined the moderating effects of team trust, technology support and leader experience on the relationship between the average of individual’s training proficiency by team on a computer-assisted (i.e., CDROM-based) training program and team performance as assessed by team customer satisfaction ratings. Using data collected from 40 GDTs in a high technology company, we found that the relationship between team’s average training proficiency and team performance was complex and moderated by several factors. Specifically, teams’ average training proficiency had a positive association with customer satisfaction when GDTs were higher, rather than lower, in both trust and technology support and when team leaders had longer, rather than shorter, levels of tenure with their specific team.

Ravi Sen, Department of Information and Operations Management “Buyers’ Choice of Online Search Strategy and its Managerial Implications” Journal of Management Information Systems, Summer 2006 With Ruth C. King, Michael J. Shaw

The Internet offers several tools such as shopping bots and search engines that help potential buyers search for lower prices.

This paper defines buyers’ online-search strategy as using one or more of these tools to search for lower prices, and empirically

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Mays Business School at Texas A&M University

investigates the validity of economics of information search theory in explaining their choice of a particular online-search strategy. We find that buyers’ attitudes towards the price offered by their preferred online seller, their perception of online price dispersion, and their awareness of shopping agents have a significant affect on their choice of online-search strategy. An understanding of buyers’ choice of online-search strategies can help an online seller to estimate the expected probability of making an online sale, optimize online pricing, and improve online promotional and advertising activities.

L. Murphy Smith, Department of Accounting “Using a Web-Based Accounting System for Teaching Accounting System Design and Implementation” Journal of Information Systems, Fall 2006 With Paul Lin

This article describes use of a Web-based accounting system for teaching accounting system design. In this project, each student customizes an accounting system using a Web-based accounting package that allows users to enter accounting data anytime anywhere via the Internet. The student also prepares system documentation so that other end-users can efficiently use the system. Finally, the student provides a report that explains whether the Web-based accounting package has all the required features for his or her business. This project helps students learn accounting systems from the enterprise perspective instead of the piecemeal account approach. Results indicate that students significantly improve their knowledge and skills regarding systems design and implementation.

Dwayne Whitten, Department of Information and Operations Management “Diffusion of Pervasive Technologies: A Preliminary Investigation” International Journal of Services and Standards, 2006 With Daniel Wong

Computing technologies have grown to saturate every aspect of human life, with faster speed and in broader aspects. As a result, a major revolution in information technologies is emerging in the form of pervasive computing technologies.

Pervasive computing is a technology that integrates intelligent instruments, appliances, information sources and information analysis tools by high speed wire or wireless networks into a new class of ubiquitous intelligence appliances. This new class of appliances allows users to have the ability to function at any time and anywhere which provide convenient access to relevant information and applications. This paper will address some of the key issues related to pervasive computers as they relate to the diffusion of this broad array of new technologies.

Dwayne Whitten, Department of Information and Operations Management “Examining User Perceptions of Third Party Organization Credibility and Trust in an E-Retailer” Journal of Organizational and End User Computing, 2006

With Robin Wakefield

Despite the fact that over half of U.S. residents are now online, Internet users hesitate to enter into transactions with eretailers in the absence of certain assurances. Recent IS research shows that institution-based assurance structures, such as web seals, are drivers of online trust. We extend the research in online trust to include the effect of third-party organization (TPO) credibility on both Internet users’ perceptions of assurance structures and purchase risk. Findings indicate that TPO credibility is positively related to the value Internet users assign assurance structures and negatively related to perceptions of purchase risk. Furthermore, perceptions of TPO credibility are strongly associated with users’ trusting attitudes toward the e-retailer. For some online consumers, trust may have less to do with privacy and security and more to do with the reputation of the TPO. These findings have important implications for the design of web sites, the selection of assurance providers and services, and the reputation of both e-retailers and providers.

Dwayne Whitten, Department of Information and Operations Management “Measuring Switching Costs in IT Outsourcing Services” Journal of Strategic Information Systems, 2006 With Robin Wakefield

Switching costs play a major role in managerial decisions to continue or discontinue an IT outsourcing service. This paper emphasizes the importance of switching cost analysis to the understanding of inter-organizational exchange relationships.

Based on transaction cost theory and social exchange theory, we specify a second-order switching cost model that provides greater insight into the underlying dimensions influencing switching behavior. The multidimensional nature of the switching cost construct is modeled and tested using data from organizations that outsource the application development function. Findings provide support for a higher-order construct with implications for how switching costs are defined, measured and operationalized in larger nomonological models.

Dwayne Whitten, Department of Information and Operations Management “Mobile Computing and Intentions to Use Hedonic/ Utilitarian Mobile Devices” European Journal of Information Systems, 2006 With Robin Wakefield

IS research demonstrates the importance of subjective factors such as flow and cognitive absorption for understanding human-computer interactions. This study advances technology acceptance research by examining the influence of individual traits and affective beliefs on rational technology beliefs and intentions to use a mobile device. Using the foundation of Cognitive-Experiential Self-Theory, we specify relationships among individual user characteristics and technology beliefs in the context of hedonic and utilitarian technology use.

Specifically, we model the associations among cognitive absorption and playfulness with the beliefs of enjoyment, perceived usefulness and perceived ease of use. Findings

indicate that affective beliefs are an important antecedent of user behavior in both hedonic and functional contexts, and technology purpose influences the cognitive processing of users.

Playfulness and absorption significantly influence enjoyment beliefs and usage intentions for hedonic PDA use, but their influence is less strong in utilitarian settings. Furthermore, enjoyment beliefs significantly impact usefulness beliefs in utilitarian settings but are less important in hedonic settings.

Dwayne Whitten, Department of Information and Operations Management “Telemedicine: Developing a Framework to Classify Technology Strategies” International Journal of Electronic Healthcare, 2006 With Borgmeyer, Kayworth

Networking technology was born out of a necessity to communicate between two or more parties more efficiently and effectively than via traditional methods, such as phone and the United States Postal Service. Today, these technologies are converging with health care to provide additional options and benefits to patients via telemedicine. This paper first defines the concept of telemedicine and then provides a framework to classify the different forms of telemedicine. Following this, we discuss the various benefits of telemedicine as well as the various challenges faced by healthcare organizations seeking to move into this promising area. The paper then concludes with a discussion of future directions for telemedicine.

Christopher J. Wolfe, Department of Accounting “Why Wait? Modeling the Factors that Influence the Decision of When to Learn a New Use of Technology” Journal of Information Systems, Fall 2006 With T. Loraas

This study examined the decision of when potential system users choose to learn new uses of technology. To explain the outcome of this decision, we construct a model based on deferral option pricing theory and operationalize its parameters through constructs consisting of anticipated emotions regarding failure costs, waiting costs and potential rewards. Additionally we operationalize and test alternative explanations defining the outcome of when a new use of technology is learned – these consist of perceived usefulness of the technology, time pressure and subjective norms. These decision determinants were examined across two experiments; each experiment used a vignette-based methodology that evoked a different level of external motivation. In the case of a powerful external referent, subjective norms appeared to crowd out intrinsic responses, and it dominated the decision to learn a new use of technology.

However, when an external referent did not dominate the decision setting, anticipated emotions in the form of perceived failure costs and perceived waiting costs defined the decision of when to learn a new use of technology. Our findings offer theoretical support for the efficacy of deferral option theory and underscore the importance of modeling impediments in the decision to learn a new use of technology in situations when an external motivator does not dominate the decision.

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Department of Accounting Journ al articles Lorence L. Bravanec “Point and Counterpoint: The Consumption vs. Income Tax Debate” News Quarterly of the American Bar Association Taxation Section, Summer 2006

The article asks some fundamental questions bearing on the proposed switch to consumption taxes.

L. Murphy Smith “Impact of an Audit Reporting Expert System on Learning Performance: A Teaching Note” Accounting Education, March 2006 With R.S. McDuffie

To address the difficulty of presenting audit reporting concepts to students, the authors constructed and used an audit reporting system, named AUDPORT, in their first-level auditing classes at two major state universities. This paper reports its use as a teaching aid and its impact on student performance.

Dennis R. Lassila Benders 2007 Payroll Tax Guide, LexisNexis, Matthew Bender, Newark, New Jersey: 2006 With Bob G. Kilpatrick, Matthew Bender Tax Staff

This book provides a comprehensive analysis of and planning considerations related to federal and state employment taxes and social security benefits. The book covers each type of employment tax, including federal and state income tax withholding, federal social security taxes, and federal and state unemployment taxes. It considers how these taxes are applied, which types of workers are subject to these taxes, how federal employment taxes apply to various forms of compensation, and the major employment tax reports that must be filed by employers.

Dennis R. Lassila “Tax Treatment of Bank Expenses” Chapter in Banking Law, Ed. Eve Arnold, LexisNexis, Matthew Bender, Newark, New Jersey: 2006

Books a nd book chapters

This chapter provides a comprehensive review and analysis of the income tax laws and planning considerations related to major types of bank expenses.

Gary A. Giroux

Dennis R. Lassila

Earnings Magic and the Unbalance Sheet, Wiley, Hoboken, New Jersey: 2006

With shrewd tips and state-of-the-art analytical tools, this book arms readers with the key strategies and principles to help evaluate whether a company’s bottom line is headed toward excellence or financial abuse. This eye-opening guide walks readers through the tangle of potentially inflated earnings and misleading accounting disclosures to determine a company’s financial reality.

Michael R. Kinney Cost Accounting, Foundations and Evolutions, 6th ed., Southwestern Publishing Co., Mason, Ohio: 2006 With Cecily Raiborn, Jenice Prather-Kinsey

This college cost accounting textbook is adopted widely in the United States and internationally. The text focuses on both traditional cost accounting techniques and methods as well as leading edge innovations. The text is differentiated from competitors in that accounting information is discussed through the lens of an information user rather than that of an accountant.

“Tax Treatment of Bank Income” Chapter in Banking Law, Ed. Eve Arnold, LexisNexis, Matthew Bender, Newark, New Jersey: 2006

This chapter provides a comprehensive review and analysis of the income tax laws and planning consideration related to various types of income received by banks.

Mary Lea McAnally Cases in Financial Reporting: An Integrated Approach with an Emphasis on Earnings and Persistence, Pearson Education, Inc., Upper Saddle River, New Jersey: 2006 With D. Eric Hirst

A collection of financial accounting cases designed to help readers become financial statement users. Each case uses financial statement information and a number of topical questions. This comprehensive book provides a complete review of analyzing balance sheets, income statements, statements of cash flows, ratio analysis and interpreting and understanding specific accounts.

Thomas C. Omer “Auditor-Provided Tax Services: The Effects of a Changing Regulatory Environment,” The Accounting Review, October 2006 With Jean C. Bedard, Diana Falsetta

This study investigates auditor-provided tax services from 2000 to 2002, during which fees paid to auditors for nonaudit

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services (NAS) were disclosed, but separate disclosure of tax service fees was voluntary. We examine changes in the market for tax NAS in 2002, as Congress debated possible prohibition of these services. Overall, our findings imply significant change in auditor-provided tax services prior to 2003, when separate disclosure of auditor-provided tax service fees was mandated.

may be detrimental to the perceived and actual relevance of these journals since technology and systems issues are vital to the accounting profession.

L. Murphy Smith

“Evidence from Auditors About the Causes of Inaccurate Budgets: Do Clients Cause Budget Overruns” Advances in Accounting, 2006 With S. Buchheit, W. Pasewark

Reflections on Accounting Educational Research, Teaching and Curriculum Section of the American Accounting Association, Orlando, Florida: 2006

This monograph examines contributions of accounting educational research in five areas: how educational research contributes to accounting practice; the use of historical research in the accounting classroom; approaches to learning; contributions of educational research to two-year colleges; and contributions of educational research to international accounting. The aim of this monograph is that these articles will help show the value of accounting education research.

L. Murphy Smith

Books a nd book chapters Jerry R. Strawser

This study identified primary drivers of audit budget inaccuracy. Our results show a positive association between using the budget for evaluative purposes and favorable (or less unfavorable) budget variances. In addition, despite the fact that our sample is comprised of continuing audit engagements, weak client controls and relatively uncooperative clients have the greatest impact on unfavorable budget variances. Our results suggest that accounting firms do not sufficiently accommodate client-related factors in establishing their audit budgets.

“Systems Research Published in Major Accounting Academic and Professional Journals” Journal of Emerging Technologies in Accounting, 2006

Conference papers

This study seeks to answer the question to what extent does the accounting literature include technology and systems research? And, is technology and systems research adequately addressed in the accounting literature? This study examines the proportion of technology and systems articles in seven topranked accounting journals, four academic and three professional. The findings indicate that while there has been a dramatic increase in the proportion of systems articles published in the professional journals, there were few technology and systems articles published in the academic journals. This might suggest a lack of appropriate attention by academic accounting journals to this important area, which

“Concede or Deny: Do Management Persuasion Tactics Affect Auditor Evaluation of Internal Control Exceptions?”

With E. Mauldin, M. Diaz Presented at American Accounting Assocition Auditing Section mid-year meeting in Charleston, South Carolina

Christopher J. Wolfe

L. Murphy Smith and Michael S. Drake “External Auditor Reliance on Internal Auditing Practices: External and Internal Auditor Perceptions” Presented at the 2006 American Accounting Association Southwest Region annual meeting in Oklahoma City, Oklahoma

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Department of Finance JOURN A L A RTICLES L. Paige Fields and Donald R. Fraser “Do Bank Loan Relationships Still Matter?” Journal of Money, Credit, and Banking, August 2006 With Steve Byers, Tammy K. Berry

James (1987) and Lummer and McConnell (1989) find that during the 1970s and 1980s the market responded positively to announcements of bank lending agreements. However, many of the advantages associated with bank lending relationships have largely disappeared since the 1980s due to financial system changes and greater availability of and less costly financial information. We find that bank loan announcements produced positive abnormal returns in the 1980s, but by the latter part of our sample period those announcement returns disappear entirely. We do find that bank loan relationships may still be valuable to smaller, poorer performing firms or during periods of high credit risk spreads.

Michael Gallmeyer “Tax Management Strategies with Multiple Risky Assets” Journal of Financial Economics, May 2006 With Ron Kaniel, Stathis Tompaidis

We study the consumption-portfolio problem in a setting with capital gain taxes and multiple risky stocks to understand how short selling influences portfolio choice with a shorting-the-box restriction. Our analysis uncovers a novel trading flexibility strategy whereby, to minimize future taxinduced trading costs, the investor optimally shorts one of the stocks (or equivalently, buys put options) even when no stock has an embedded gain. Alternatively, an imperfect form of shorting the box can reduce aggregate equity exposure ex post. Given these two short selling strategies, it is common for an unconstrained investor to short some equity while a constrained investor holds a positive investment in all stocks.

With no shorting, the benefit of trading separately in multiple stocks is not economically significant.

Thomas O. Jackson “Innocent Landowner Programs and Their Effects on Environmental Risk and Property Value Impacts” The Appraisal Journal, Spring 2006 With Jennifer Pitts

This article examines the growing use of state programs that protect owners or purchasers of properties that may be impacted by environmental contamination. These parties may be considered “innocent landowners” under many state laws if they meet certain requirements related to the contamination source and other factors. By participating in such programs, landowners and/or prospective purchasers are relieved of certain future liabilities related to the contamination and its

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remediation under applicable state standards. This has the beneficial effect of reducing environmental risk and potentially adverse effects on property values.

Thomas O. Jackson “Institutional Controls and Contaminated Property Valuation” The Appraisal Journal, Fall 2006 With Michael Sowinski

As environmental agencies adopt more site and risk specific approaches to the remediation of contaminated properties, an increasingly used technique to achieve site closure involves the implementation of institutional controls. Institutional controls to some extent may limit the use of the property during cleanup or may limit the future use of the property subsequent to cleanup. Real estate developers and others may encounter these controls on the use of contaminated properties that have been remediated, or on contaminated properties undergoing remediation with an approved cleanup plan premised on the implementation of institutional controls to facilitate the achievement of site and use specific remediation objectives.

Shane A. Johnson “Dividend Policy, Signaling, and Discounts on Closed-End Funds” Journal of Financial Economics, September 2006 With J.C. Lin, Roy Song

We test the predictions of dividend signaling models using closed-end equity funds that adopt explicit policies committing them to pay minimum dividend yields. These policies represent deliberate attempts to reduce share price undervaluation relative to NAV. Funds that adopt minimum dividend policies experience reductions in their share price discounts, trade at smaller discounts than other funds, earn greater excess returns following policy adoption, and their managers survive longer than other managers do. The results are broadly consistent with the predictions of dividend signaling models, and suggest that high quality closed-end funds can reduce undervaluation via dividend policy.

Conference papers Thomas O. Jackson “Environmental Risk Perceptions of Non-Source Contaminated Properties and Adjacent Uncontaminated Properties” Presented at the April 2006 annual meeting of the American Real Estate Society in Key West, Florida

Thomas O. Jackson “Pricing Environmental Risk in Contaminated Property Transactions” Presented at the 2006 fall professional conference of the Society of Industrial and Office Realtors in Charlotte, North Carolina

Department of Information and Operations Management Journ al articles ’Jon (Sean) Jasperson “Defining IT-Related Work Systems: Response to Alter” Communications of the AIS, February 2006 With Pamela E. Carter, Robert W. Zmud

Alter (2006) critiques our definition and use of the term “work system” in Jasperson, Carter and Zmud (2005). We respond to his conclusions by focusing on our conceptualization of work systems, of which the definition is only one part. In addition, we reemphasize and clarify our definition of work systems and discuss where we believe Alter misinterprets our work.

H. Alan Love “Retail Zone Pricing and Simulated Price Effects of Upstream Mergers” International Journal of the Economics of Business, July 2006 With Geoffrey M. Pofahl, Oral Capps, Jr.

Despite the oft-recognized reality of zone pricing by food retailers, this form of price discrimination has received very little attention within the context of upstream merger analysis.

Promoting this issue to center stage, we relax the conventional merger simulation assumption of uniform pass-through by retailers. Relaxing this assumption allows us to explore the potential impacts of zone pricing on post-merger price effects.

Using the ready-to-eat cereals industry as a backdrop, we show empirically that high income price zones are more significantly affected by post-merger price increases than low-income price zones. Ignoring retail price discrimination veils a potentially complex and diverse set of price effects that are otherwise lost by averaging across all price zones.

Rogelio Oliva “Loop Eigenvalue Elasticity Analysis: Three Case Studies” System Dynamics Review, 2006 With Christian E. Kampmann

We explore the application of loop eigenvalue elasticity analysis (LEEA) to three different models in order to assess the potential of the method for generating insights about model behavior and to uncover issues in developing the method further. The results indicate that the utility of the method depends upon the character of the model and dynamics involved. In models where the transient behavior is of interest, the method yields insights on par with the pathway participation method, though better tools to link the method to time paths of particular variables are needed.

In quasi-linear models, LEEA shows the most promise, quickly revealing the different behavior modes and the associated dominant structures. Finally, analysis of the nonlinear chaotic model reveals that the eigenvalues can change substantially over time even during phases when the mode of behavior appears

constant. The paper concludes with our thoughts on the strengths and weaknesses of the LEEA and suggestions for future work.

Rogelio Oliva “Managing Functional Biases in Organizational Forecast” Foresight: International Journal of Applied Forecasting, Fall 2006 With Noel H. Watson

The authors describe how organizational biases arise from the different incentives, agendas and blind spots of the various functional areas of a business, and how they compromise forecast accuracy and disrupt the supply chain process. They present a case study—the Leitax corporation—of how one organization successfully used consensus forecasting to manage against functional blind spots and incentive misalignments.

Arun Sen “Data Warehousing Process Maturity: An Exploratory Study of Factors Influencing User Perceptions” IEEE Transactions on Engineering Management, August 2006 With Atish P. Sinha, K. Ramamurthy

This study explores the factors influencing perceptions of data warehousing process maturity. Data warehousing, like software development, is a process which can be expressed in terms of components such as artifacts and workflows. Based on the literature in software development and maturity, we identify a set of features for characterizing the levels of data warehousing process maturity and conduct an exploratory field study to empirically examine if those indeed are factors influencing perceptions of maturity. Our focus in this study is on managerial perceptions of a data warehousing process. The results of this exploratory study indicate that several factors have an impact on DWP maturity, as perceived by IT professionals. From a practical standpoint, the results provide useful pointers, both managerial and technological, to organizations aspiring to elevate their data warehousing processes to more mature levels. The study also opens up several areas for future research, including instrument development for assessing DWP maturity.

Arun Sen “Current Trends in Web Data Analysis” Communications of the ACM, November 2006 With Christos Pattichis, Peter Dacin

According to Shop.org, U.S.-based visits to retail websites exceeded 10 percent of total Internet traffic for the first time ever, accounting for 11.39 percent, 11.03 percent and 10.74 percent, respectively, on Nov. 24, Thanksgiving, and the day after Thanksgiving in 2004. Hitwise.com found that the top five sites luring traffic over the same timeframe were eBay, Amazon.com, Dell.com, Walmart.com, BestBuy.com and Target.com, in that order.

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Ravi Sen “A Qualitative Analysis of the Role of Users, Vendors, and Governments in the Standards Development Process” Communications of AIS, January 2006

Existing literature on IT standards focuses on the role of technical factors such as network effects and competitive behavior on the creation of standards. However, the role of users and vendors in initiating the standards definition and ratification process is less well understood. Given the advantages associated with standards, all users and vendors of IT products would be expected to be glad to participate in the standards definition and ratification process. However, if that were the case, many fewer proprietary technologies would compete. This paper explains qualitatively why users, vendors, and government bodies choose (or don’t choose) to participate in the standards definition and ratification process. The paper concludes by analyzing strategies to recover the cost of standards definition and ratification process, and their impact on the standards adoption rate.

Ravi Sen “Understanding Open Source Software: A Research Classification Framework” Communications of AIS, February 2006 With Mathew Nelson, Chandrasekar Subramaniam

The success of open source applications such as Apache, Linux and Sendmail spurred interest in this form of software, its development process and its implication for the software industry. This interest is evident in the existing research being done to address various issues relevant to open source software and open source methodology. This paper proposes a research classification framework that: informs about the current state of open source software research, provides a formal structure to classify this research, and identifies future research opportunities.

Marietta J. Tretter “Harnessing Data Mining to Explore Incident Databases” Journal of Hazardous Materials, 2006 With Sumit Anand, Nir Keren, Yanjun Wang, T. Michael O’Connor, M. Sam Mannan

Large numbers of incident-related databases have been established in the last three decades. The majority of attempts to explore these data marts were trials to identify patterns via first glance into the datasets. This study investigated a subset of incidents from fixed facilities in Harris County, Texas, extracted from the National Response Center database. By classifying the information into groups and using data mining techniques, interesting patterns of incidents according to characteristics such

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as type of equipment involved, type of chemical released and causes involved were revealed and these were used to modify the annual failure probabilities of equipment.

Dwayne Whitten “Bringing IT Back: An Analysis Of Application Development Backsourcing and Switching” Decision Sciences Journal, 2006 With Dorothy Leidner

Whereas the decision to outsource information systems (IS) has been an important focus in IS research and practice, the decision to switch vendors or to backsource has received little attention. Evidence suggests that in practice, however, the decision to backsource or to switch vendors is becoming increasingly common as firms vie for ways to continue to cut information technology (IT) costs and improve IT service levels. This research specifically examines the factors associated with the decision to backsource or to switch vendors. Based on a sample of 160 IT managers involved with application development, we compare and contrast the perceptions of those who switched vendors, backsourced, or continued in an outsourcing relationship for application development. Our findings suggest that product quality, service quality, relationship quality and switching costs are related to the decision to backsource application outsourcing. However, service and product quality did not influence the decision to switch vendors. Rather, firms that made the decision to switch vendors reported high levels of service and product quality but low levels of relationship quality and switching costs.

Books a nd book chapters Marietta J. Tretter Knowledge Discovery with JMP, SAS Institute, Cary, North Carolina: 2006

This book introduces the student to a comprehensive approach to data mining large data sets using inexpensive JMP software. The software offers data mining tools comparable to those in much more expensive data mining software suites. The book offers a serious introduction to data mining using a large data set and inexpensive JMP software.

Conference papers Marietta J. Tretter and Uzma Raja “Investigating Open Source Project Success: A Data Mining Approach to Model Formulation, Testing and Validation” Presented at the 2006 SAS Users Group International conference in San Francisco, California

Department of Management Journ al articles S. Trevis Certo “Spotlight on Entrepreneurship” Business Horizons, July 2006 With Samuel C. Certo, Christopher R. Reutzel

Entrepreneurship continues to play an important role in the development of the global economy. According to a recent report released by the Kaufman Foundation, a non-profit organization devoted to increasing entrepreneurial activities, entrepreneurs in the U.S. alone establish approximately 550,000 new businesses per month. In this spotlight, the authors discuss three specific academic studies. In particular, we highlight three topics that received significant academic attention from entrepreneurship researchers: top management teams, venture capital, and initial public offerings.

S. Trevis Certo “Strategy Research and Panel Data: Evidence and Implications” Journal of Management, June 2006 With Matthew Semadeni

A number of studies in strategic management rely on panel (longitudinal) data to test theory. The advantages of panel data notwithstanding, such data introduce analytic problems (e.g., autocorrelation, heteroskedasticity, contemporaneous correlation) that make traditional estimators (e.g., ordinary least squares) inappropriate. This study highlights the influence of contemporaneous correlation, a statistical problem that affects the analysis of panel data. Using Monte Carlo simulations, the authors find that contemporaneous correlation is particularly problematic when analyzing data sets typically used in strategic management research. They suggest straightforward techniques to mitigate the harmful effects of contemporaneous correlation.

Joseph E. Coombs “Measuring Technological Capability and Performance” R&D Management, September 2006 With Paul E. Bierly III

The relation between technological capability and firm performance is more complex than what is generally assumed.

Researchers have not been able to consistently find empirical support for this apparently ‘simple’ relation. The objective of this study is to illustrate the theoretical and empirical complexity of this relation and explain why the use of different measures can lead to dramatically different results. In this study, we analyze the technological capability–performance relation in 201 large U.S. public manufacturing companies. A variety of patent statistics and a measure of research & development (R&D) intensity are used as indicators for technological capability. Six measures of performance are used

as dependent variables: return on assets, return on equity, return on sales, market value, market value added, and economic value added. The results vary substantially, depending on which measures are used for the independent and dependent variables. We conclude by discussing the effectiveness of a variety of technological capability measures using patent citations, and illustrate why a measure of R&D spending and the total number of patents are usually not valid measures of a firm’s technological capability.

Michael A. Hitt “Market Value Effects of Acquisitions Involving Internet Firms: A Resource-Based Analysis” Strategic Management Journal, October 2006 With Klaus Uhlenbruck, M. Semadeni

While most prior research suggests that the average change in market value of acquiring firms varies closely around zero, recent research grounded in the resource-based view and organizational learning theory identify positive returns to acquirers. We contribute to this literature by focusing on acquisitions of Internet firms and the potential for the transfer of scarce resources. We hypothesize that acquisitions made by offline firms of Internet firms and by Internet firms of other Internet firms lead to positive market valuation for the acquirer.

Results of an event study of 798 acquisitions of Internet firms provided support for these predictions. We also find that prior alliances with online firms do not reduce the gains from such acquisitions to offline firms.

Michael A. Hitt “Balancing Vertical Integration and Strategic Outsourcing: Effects on Product Portfolio, Product Success and Firm Performance” Strategic Management Journal, September 2006 With Frank T. Rothaermel, Lloyd A. Jobe

Most prior research has focused on vertical integration or strategic outsourcing in isolation to examine their effects on important performance outcomes. In contrast, we focus on the simultaneous pursuit of vertical integration and strategic outsourcing. Our baseline proposition is that balancing vertical integration and strategic outsourcing in the pursuit of taper integration enriches a firm’s product portfolio and product success, and in turn contributes to competitive advantage and thus to overall firm performance. We derive a set of detailed hypotheses, and test them on a unique and fine-grained panel of longitudinal data documenting more than 3,500 product introductions in the global microcomputer industry. The results provide strong support for the notion that carefully balancing vertical integration and strategic outsourcing when organizing for innovation helps firms to achieve superior performance.

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Michael A. Hitt “Leveraging Tacit Knowledge in Alliances: The Importance of Relational Capabilities to Build and Leverage Relational Capital” Journal of Engineering and Technology Management, September 2006 With Jaime D. Collins

Effectively managing existing tacit knowledge stocks and transferring knowledge between partners contributes to firm capabilities that allow them to differentiate their goods and services from those of their competitors. In highly competitive industries, firms need to focus on proactively managing their tacit knowledge resources to ensure survival. Due to its latent potential for enabling firms to achieve potential competitive advantage, how firms utilize and transfer stocks of tacit knowledge requires enhanced understanding. In specific, we explain how firms use relational capabilities to build relational capital with partners. In turn, relational capital facilitates the transfer of tacit knowledge between collaborating partners. We develop several propositions regarding the factors likely to influence the transfer of a firm’s tacit knowledge resources in strategic alliances. The importance of social capital’s relational dimension, or relational capital, in this process is highlighted.

R. Duane Ireland “Effectively Managing Service Chain Organizations” Organizational Dynamics, 2006 With James G. Combs, David J. Ketchen, Jr.

Service chain organizations occupy a unique niche in the modern competitive landscape. Not only do they confront a unique set of organizational problems but, as consumers, we are all intimately familiar with them. When managed effectively, chains simplify and enhance our daily lives. When managed poorly, however, chains are often a source of immense frustration. We encourage executives to examine the challenges and responses we discuss and to consider how the insights provided might be applied within their organizations.

R. Duane Ireland “Entrepreneurship and Strategic Alliances” Journal of Business Venturing, July 2006 With Sharon A. Alvarez, Jeffrey R. Reuer

Today, alliances often involve complex deal structures, bilateral knowledge flows, and the blending of cooperation and competition amongst rivals (Reuer, 2004). During the last three decades, there has been an impressive rise in alliance research, with studies examining topics as diverse as investment patterns, organizational governance choices, network structures, trust formation, and so forth. There have been many special issues devoted to alliances in the leading journals, and alliances often represent a major share of presentations at

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management and strategy conferences. Alliance research has arguably become a cottage industry of sorts, and many alliance phenomena have been studied extensively despite the relatively short history of this stream of research. Given these developments in practice and theory, we believe that entrepreneurship is one of the most important and interesting frontiers for research on alliance phenomena.

R. Duane Ireland “A Health Audit for Corporate Entrepreneurship: Innovation at all Levels, Part I” Journal of Business Strategy, 2006 With Donald F. Kuratko, Michael H. Morris

This article identifies issues to consider when designing a corporate entrepreneurship strategy, discusses the triggers of corporate entrepreneurship and describes an internal work environment that supports corporate entrepreneurship. Based on the extant literature, case studies and the authors’ experiences with a diverse mix of companies, the nature and importance of a corporate entrepreneurship strategy is described, together with insights into the internal and external factors that facilitate corporate entrepreneurship and a strategy used to support it. The ability to foster high levels of entrepreneurial intensity and formulate effective corporate entrepreneurship strategy is associated with key elements of the organizational climate.

Conclusions are drawn regarding the value an entrepreneurial mindset creates when used in established firms.

R. Duane Ireland “A Health Audit for Corporate Entrepreneurship: Innovation at all Levels, Part II” Journal of Business Strategy, 2006 With Donald F. Kuratko, Michael H. Morris

The purpose of this article is to introduce and discuss the “Entrepreneurial Health Audit.” This organizational tool is used to assess a firm’s entrepreneurial intensity, diagnose organizational characteristics low in entrepreneurial intensity, and to create an understanding of the processes needed to foster a corporate entrepreneurship strategy as a means of improving organizational performance. Based on the existing literature, case studies and the authors’ own research and experiences with a diverse mix of companies, the paper develops a three-stage “Entrepreneurial Health Audit.” Top-level managers can use this tool to determine their firm’s ability to act entrepreneurially at a point in time.

books a nd chapters Michael A. Hitt and R. Duane Ireland Understanding Business Strategy, Thomson South-Western Publishing, Cincinnati, Ohio: 2006 With Robert E. Hoskisson

This text encourages a hands-on approach to learning with applications and features such as experiential exercises, BizFlix

video clips, and brief end of chapter cases. Further, features such as the “Strategy Tool Box” and “Your Career” provide practical tools as students embark on their own careers. After reading Understanding Business Strategy, students will not only have an understanding of modern strategic management, but they will also grasp the application of these tools in their own careers.

Michael A. Hitt, Tim R. Holcomb and R. Michael Holmes, Jr. “Diversification to Achieve Scale and Scope: The Strategic Implications of Resource Management for Value Creation,” Chapter in Advances in Strategic Management, Eds. J. Baum, A. Van Witteloostujin, S. Dobrev, Elsevier, Amsterdam: 2006

Although the growing literature on scale and scope in strategic management has produced insights into possible linkages between diversification and firm performance, the lack of research examining implementation may have hindered our understanding of the broader performance effects of these strategies. To address this shortcoming, we draw on the resource-based view of the firm to examine how firms can exploit diversifying investments designed to achieve organizational scale and scope. Indeed, sustained competitive advantage and economic returns may depend on how firms manage their resources when implementing diversification.

We develop a model linking diversification strategies and actions to the management of firm resources. Specifically, we argue that successful firms more effectively structure their resource portfolio, bundle resources into capabilities, and then leverage these capabilities when diversifying across product and geographic markets. Finally, we address potential complementarities between strategic management and organizational ecology perspectives on organizational scale and scope.

R. Duane Ireland Entrepreneurship: Successfully Launching New Ventures, Prentice-Hall, Englewood Cliffs, New Jersey: 2006 With Bruce Barringer

This book serves as a practical guide to the process of launching new ventures. It begins by introducing a model of the entrepreneurial process, and follows the model throughout the book. Emphasis is placed on the beginnings of the entrepreneurial process—particularly opportunity recognition and feasibility analysis. A four-part organization makes the journey toward understanding the entrepreneur process both enjoyable and productive.

R. Duane Ireland and Michael A. Hitt “The Make or Buy Growth Decision: Strategic Entrepreneurship versus Acquisitions” Chapter in The Search for Organic Growth, Eds. E. Hess, R. Kazanjian, Cambridge University Press, Cambridge, U.K.: 2006 With C. Tuggle

most top executives. Making acquisitions allows firms to rapidly achieve major growth. However, acquisitions can also be costly in financial investments and in terms of executive time and focus to implement them successfully. We argue that while acquisitions can create value for shareholders in some cases, a better way to achieve growth is organically. We recommend that firms engage in strategic entrepreneurship to create innovation that is valued in the marketplace. Such innovation is more likely to produce competitive advantages than acquisitions. We explore the means by which firms identify opportunities in markets and then design ways to exploit those opportunities. We conclude that firms engaging in strategic entrepreneurship are more likely to be successful and leaders in their markets.

R. Duane Ireland and Justin W. Webb “International Entrepreneurship in Emerging Economies: A Resource-Based Perspective” Chapter in Entrepreneurial Strategies: New Technologies and Emerging Markets, Eds. A. Cooper, S. Alvarez, A. Carrera, L. Mesquita, R. Vassolo

As Dimitratos & Plakoyiannaki (2003) note, the international entrepreneurship literature remains in its infancy.

Given the paucity of research dealing with the phenomenon and its growing importance, the purpose of our work is to contribute to an emerging field of inquiry, international entrepreneurship, as practiced within an increasingly important setting in the global marketplace—emerging economies.

Conference papers R. Duane Ireland “Pioneering the Entrepreneurship Field: Lessons Learned Along the Way and Insights Into the Future” Presented at a 2006 Federation of Business Disciplines conference in Oklahoma City, Oklahoma

R. Duane Ireland, R. Michael Holmes, Jr. and Tim R. Holcomb “Risk Evaluation in the Decision to Found a New Venture: A Conceptual Model and Theoretical Extension” Presented at the 2006 Academy of Management meeting in Atlanta, Georgia

R. Duane Ireland, Justin W. Webb and Laszlo Tihanyi “Organizational Identity and the Strategy-Structure Link in Multinational Corporations” Presented at the 2006 Academy of Management meeting in Atlanta, Georgia

Growth is valued in equity markets because it signals a healthy and successful firm. As such, growth is often a priority goal for 29

R. Duane Ireland, Justin W. Webb and Laszlo Tihanyi “Theoretical Suggestions for the Presence of Rigidity and Flexibility in New Ventures” Presented at the 2006 Babson Kaufman Research Conference in Bloomington, Indiana

Michael W. Pustay, Leonard Bierman, Asghar Zardkoohi “A Life Cycle Model of Political Participation” With Jonathan Brookfield Presented at the 2006 Academy of International Business conference in Beijing, China

David G. Sirmon and Michael A. Hitt “The Case for Synchronization: How Matching Resource Investment and Firm Strategy Affects Performance” Presented at the 2006 Academy of Management meeting in Atlanta, Georgia

Richard W. Woodman “Managerial Recognition of Employee Creative Ideas: A Preliminary Investigation of the Zhou and Woodman (2003) Model” With Aneika Simmons Presented at a 2006 Southern Management Association meeting in Clearwater Beach, Florida

Department of Marketing Journ al articles Paul S. Busch and Rajan Varadarajan “Brand Portfolio, Corporate Image and Reputation: Managing Brand Deletions” Journal of the Academy of Marketing Science, April 2006 With Mark P. DeFanti

Brand portfolio management addresses, among other issues, the interrelated questions of what brands to add, retain, or delete. A small number of brands in a firm’s brand portfolio can often have a disproportionately large positive or negative impact on its image and reputation and the responses of stakeholders.

Brand deletions can be critical from the standpoint of a firm being able to free up resources to redeploy toward enhancing the competitive standing and financial performance of brands in its portfolio with the greatest potential to positively affect its image and reputation. Against this backdrop, the authors focus on the organizational and environmental drivers of brand deletion propensity, the predisposition of a firm to delete a particular brand from its brand portfolio. The authors propose a conceptual model delineating the drivers of brand deletion propensity and suggest directions for future research, including the related concept of brand deletion intensity.

James H. Leigh “Dimensional Relationships of Recall and Recognition Measures with Selected Cognitive and Affective Aspects of Print Ads” Journal of Advertising, Spring 2006 With George M. Zinkhan, Vanitha Swaminathan

This study builds on prior work in advertising by investigating issues associated with the dimensional

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representation of memory for print advertisements and the antecedent factors that relate to those dimensions. Of particular interest to this research are answers to questions associated with whether memory for print ads is unidimensional or multidimensional, as assessed by aided recall and recognition methods, with the nature of the antecedent factors of ad characteristics and subjective reactions, and with how the antecedents relate to memory. The study identified two dimensions of ad-based antecedents to memory, labeled cognitive and affective aspects, and two dimensions of memory, labeled recall and recognition. It was found that recall is influenced by cognitive, and to a lesser extent, by affective factors, whereas recognition is primarily influenced by affective factors. This research provides support for the potential use of stimulus-related factors in conjunction with, or as surrogates of, memory-based measures of effectiveness.

Venkatesh Shankar “Challenges and Opportunities in Multichannel Management” Journal of Service Research, Fall 2006 With Scott Neslin, Dhruv Grewal, Robert Leghorn, Marije Teerling, Jacquelyn Thomas, Peter Verhoef

Multichannel customer management is the design, deployment, coordination and evaluation of channels through which firms and customers interact, with the goal of enhancing customer value through effective customer acquisition, retention and development. The authors identify five major challenges practitioners must address to manage the multichannel environment more effectively: (1) data integration, (2) understanding consumer behavior, (3) channel evaluation, (4) allocation of resources across channels, and (5) coordination of channel strategies. The authors also propose a framework that

shows the linkages among these challenges, and provides a means to conceptualize the field of multichannel customer management. A review of academic research reveals that this field has experienced significant research growth, but the growth has not been distributed evenly across the five major challenges.

The authors discuss what has been learned to date, and identify emerging generalizations as appropriate, concluding with a summary of where the research-generated knowledge base stands on several issues pertaining to the five challenges.

Venkatesh Shankar “The Effects of New Franchisor Partnering Strategies on Franchise System Size” Management Science, May 2006 With Scott Shane, Ashwin Aravindakshan

This article examines the use of strategic actions to attract partners and increase system size in the context of franchising.

We build on research in entrepreneurship, marketing, organization theory, strategic management, and finance, to develop specific hypotheses about the influences of franchisor pricing policy and strategic control decisions on system size. We test these hypotheses empirically, using panel data on a sample of 1292 business format franchise systems from 152 industries that were established in the United States between 1979 and 1996 and followed from their inception forward in time. The results show that franchisors that grow larger: (1) lower royalty rates as the systems age, (2) have low up-front franchise fees and raise them over time, (3) own a small proportion of outlets and lower that percentage over time, (4) keep franchisees’ initial investment low, and (5) finance their franchisees.

Rajan Varadarajan “Does Success Diminish Competitive Responsiveness? An Empirical Investigation” Journal of the Academy of Marketing Science, July 2006 With Satish Jayachandran

Previous research provides conflicting evidence of the association between the past performance of a business and its competitive responsiveness, with researchers observing both positive and negative relationships. To clarify this issue, the authors test a model using survey data from the retailing industry. The model delineates direct and indirect mediated paths through ability to respond, motivation to respond, and awareness of competitors’ actions to show how past performance can have both positive and negative influence on competitive responsiveness. However, the overall impact of past performance of an organization on its competitive responsiveness is positive. The implications of these findings for research, practice, and theory are discussed.

Books a nd book chapters Leonard L. Berry and Ann Mirabito “Recapturing Marketing’s Mission” Chapter in Does Marketing Need Reform?: Fresh Perspectives on the Future, Eds. Raj Sisodia, Jagdish Sheth, M.E. Sharpe: Armonk, New York, 2006

Over the years, marketers have had a positive, defining impact on society. Marketers have influenced the creation of myriad goods and services that have lessened the drudgery of housework, enhanced consumers’ self-confidence and sense of style, and enabled consumers to use their time—a finite resource—in more productive and satisfying ways. Supply chain managers have wrung excess costs out of distribution systems, reducing unnecessary expenses to customers. Advertisers have entertained television audiences with novel and informative campaigns.

Despite these contributions, however, the net impact of marketing on the quality of life has shifted, subtracting rather than adding value. The enormous power for social good that marketing once wielded has diminished and has even been misused. Misuse of social power leads to the decline of social power, and this is happening with marketing.

Alina Sorescu “Building Long-term Firm Value Through Innovation” Chapter in Marketing Science Institute Report Number 06-122, Marketing Science Institute, Cambridge, Massachusetts: 2006 With Jelena Spanjol

What innovation strategies and conditions create the greatest long-term financial value for the firm? Here, the authors assess the long-term economic rents to firms’ aggregate innovation output, taking into consideration competitors’ innovative activity, innovation type (incremental versus breakthrough), and how innovations are deployed across the product categories in which the firms operate. They hypothesize that incremental innovations, while they do not generate long-term value on their own, play an essential complementary role for breakthrough innovations. Specifically, they hypothesize that greater numbers of breakthrough innovations result in greater long-term value for the firm—but only when the firm also introduces greater numbers of incremental innovations. They also hypothesize that concentrating innovative activity within a few product categories creates more value than having a broad innovative presence across product categories.

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Alina Sorescu, Venkatesh Shankar and Tarun Kushwaha “New Product Preannouncements and Shareholder Value: Do Not Make Promises You Can Not Keep” Chapter in Marketing Science Institute Report Number 06-116, Marketing Science Institute, Cambridge, Massachusetts: 2006

From a shareholder value standpoint, do the benefits outweigh the risks of preannouncing new products? To address this question, the authors build on agency and signaling theories to develop hypotheses about the effects of new product preannouncements on shareholder value, and empirically test these hypotheses on a sample of software and hardware new product preannouncements. The findings indicate that the financial returns from preannouncements are significantly positive in the long-term (about 13 percent in one year or up to product introduction). The authors show that preannouncements generate positive short-term abnormal returns only for firms that offer specific information about the preannounced product. The authors also show that firms earn positive long-term abnormal returns after a preannouncement if they continue to update the market on the progress of the new product. Both the short term and long-term returns are further magnified if the reliability of the preannouncement (i.e., the credibility of the preannouncing firm) is high.

Rajan Varadarajan “Musings on the Need of Reform in Marketing” Chapter in Does Marketing Need Reform?: Fresh Perspectives on the Future, Eds. Raj Sisodia, Jagdish Sheth, M.E. Sharpe, Armonk, New York: 2006

This essay addresses the question of the need for reform in marketing in the context of concerns voiced by marketing academicians regarding the: (1) diminishing influence of the marketing discipline (marketing scholars) in the academic discourse on strategy, (2) diminishing influence of the marketing function (and marketing managers) in organizations, and (3) the specter of deficiencies in scholarly research in marketing and/or marketing education leading to the marginalization of the marketing function (and marketing managers) in organizations.

Conference papers Paul S. Busch “The Role of Internal Marketing in Business to Business Branding: Past, Present, and Future Directions” Presented during 2006 academic conference Proceedings for the Institute for the Study of Business Markets in Chicago, Illinois

Alina Sorescu “The Dynamics of Radical Innovation” With Raul Rivadeneyra, Jaideep Prabhu, Rajesh Chandy Presented at the 2006 Product Development Management Association Research Forum in Atlanta, Georgia and at the 2006 American Marketing Association Winter Conference in Orlando, Florida

Collaborative Books a nd book chapters Claudette M. Peterson and Tim O. Peterson, Undergraduate Learning “Developing a Graduate Learning Community Through the Application of Adult Learning Principles” Chapter in Student Learning Communities, Faculty Learning Communities, & Faculty Development, Eds. Nancy Simpson, Jean Layne, New Forums Press, Inc., Stillwater, Oklahoma: 2006

This chapter fills a void in the literature on learning communities. Past articles have shown the value of learning communities to undergraduates, faculty and graduate students pursuing faculty status. This chapter describes the development of a graduate learning community for working professionals. It provides information on how adult learning principals can be

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used to develop such a learning community. In addition, it discusses how the faculty role must change. Finally, it presents an example of such a learning community currently in existence at Oklahoma State University at Tulsa.

Conference papers Edward P. Swanson and Christopher J. Wolfe, Department of Accounting, and Asghar Zardkoohi, Department of Management “Concentration in Publishing at Top-Tier Business Journals: Evidence and Potential Explanations” Presented at the 2006 American Accounting Association annual meeting in Washington, D.C.

Serving as an editorial board member or editor of a scholarly journal is part of many faculty members’ service to the academic community. The following faculty members joined editorial boards or became editors in the past academic year.

Editors •

rofessor of Management Lorraine A. Eden, P editor of Journal of International Business Studies

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istinguished Professor Michael A. Hitt, D co-founding editor of Strategic Management Journal

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ennett Chair in Business R. Duane Ireland, B editor of Academy of Management Journal

Associate editors •

istinguished Professor and Ford Chair in Marketing and E-Commerce D Rajan Varadarajan, associate editor of Journal of Marketing Research

Editorial review boards •

Associate Professor of Management Trevis Certo, Academy of Management Journal board

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ssociate Professor of Marketing Allen Chen, A Marketing Science board

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enneco Professor in Business Benito E. Flores, T Forecasting Letters board

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ssistant Professor of Finance Michael Gallmeyer, A Mathematics and Financial Economics board

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Marketing Professor Sanjay Jain, Marketing Science board

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epublic Bank Research Fellow D. Scott Lee, R Journal of Asia Business Studies board

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ssociate Professor of Management Christopher O.L.H. Porter, A Journal of Applied Psychology board

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ssistant Professor of Management Elizabeth E. Umphress, A Academy of Management Review board

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Assistant Professor of Management Michael Wesson, Journal of Applied Psychology board

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.J. Barlow Professor of Management Asghar Zardkoohi, T Academy of Management Review board

Research at Mays Business School 2007 College Station, Texas 77843-4113 Phone: 979.845.4711 Fax: 979.845.6639 http://mays.tamu.edu