Showing papers by "HEC Montréal published in 2012"

Leadership in the Plural

Abstract: This paper reviews the literature on forms of leadership that in one way or other imply plurality: that is, the combined influence of multiple leaders in specific organizational situations. We identify four streams of scholarship on plural leadership, each focusing on somewhat different phenomena and adopting different epistemological and methodological assumptions. Specifically, these streams focus on sharing leadership in teams, on pooling leadership at the top of organizations, on spreading leadership across boundaries over time, and on producing leadership through interaction. The streams of research vary according to their representations of plural leadership as structured or emergent and as mutual or coalitional. We note tensions between perspectives that advocate pluralizing leadership in settings of concentrated authority and those concerned with channeling the forms of plurality naturally found in diffuse power settings such as professional organizations or inter-organizational partnerships. It i...

The Role of State and Foreign Owners in Corporate Risk-Taking: Evidence from Privatization

Abstract: Using a unique database of 381 newly privatized firms from 57 countries, we investigate the impact of shareholders’ identity on corporate risk-taking behavior. We find strong and robust evidence that state (foreign) ownership is negatively (positively) related to corporate risk-taking. Moreover, we find that high risk-taking by foreign owners depends on the strength of country-level governance institutions. Our results suggest that relinquishment of government control, openness to foreign investment, and improvement of country-level governance institutions are key determining factors of corporate risk-taking in newly privatized firms.

IT as enabler of sustainable farming: An empirical analysis of farmers' adoption decision of precision agriculture technology

Abstract: Precision agriculture (PA) describes a suite of IT based tools which allow farmers to electronically monitor soil and crop conditions and analyze treatment options. This study tests a model explaining the difficulties of PA technology adoption. The model draws on theories of technology acceptance and diffusion of innovation and is validated using survey data from farms in Canada. Findings highlight the importance of compatibility among PA technology components and the crucial role of farmers' expertise. The model provides the theoretical and empirical basis for developing policies and initiatives to support PA technology adoption.

Analysis of travel times and CO2 emissions in time-dependent vehicle routing

Abstract: Due to the growing concern over environmental issues, regardless of whether companies are going to voluntarily incorporate green policies in practice, or will be forced to do so in the context of new legislation, change is foreseen in the future of transportation management. Assigning and scheduling vehicles to service a pre-determined set of clients is a common distribution problem. Accounting for time-dependent travel times between customers, we present a model that considers travel time, fuel, and CO2 emissions costs. Specifically, we propose a framework for modeling CO2 emissions in a time-dependent vehicle routing context. The model is solved via a tabu search procedure. As the amount of CO2 emissions is correlated with vehicle speed, our model considers limiting vehicle speed as part of the optimization. The emissions per kilometer as a function of speed are minimized at a unique speed. However, we show that in a time-dependent environment this speed is sub-optimal in terms of total emissions. This occurs if vehicles are able to avoid running into congestion periods where they incur high emissions. Clearly, considering this trade-off in the vehicle routing problem has great practical potential. In the same line, we construct bounds on the total amount of emissions to be saved by making use of the standard VRP solutions. As fuel consumption is correlated with CO2 emissions, we show that reducing emissions leads to reducing costs. For a number of experimental settings, we show that limiting vehicle speeds is desired from a total cost perspective. This namely stems from the trade-off between fuel and travel time costs.

A Conceptual Development of Simons’ Levers of Control Framework

Abstract: The management control literature has been criticised for having concepts that are ill-defined. This causes mixed empirical results and makes it difficult to build a coherent body of knowledge. The paper addresses this issue by developing an important framework, that of Simons’ Levers of Control, which has been criticised in the past for its vague and ambiguous definitions. Using methods of concept analysis, the paper analyses prior literature to identify ambiguities with the different levers of control and uses examples from prior field studies to illustrate these ambiguities. The paper also analyses the positive and negative dimensions of controls which, although part of Simons’ framework, have remained unexplored. For each ambiguity identified, the paper proposes a solution to improve concept definitions or to clarify the relationship between concepts. The result is a revised framework that explicitly separates managerial intentions for controls and employee perceptions of controls. Managerial intentions are comprised of three levels: 1) types of controls (social and technical) 2) which are organised as four control systems (strategic performance, operational performance, strategic boundaries and operational boundaries) and 3) which can be used diagnostically or interactively, have an enabling or constraining role and can lead to either reward or punishment. Finally, after defining the framework’s concepts and explaining how they interact, the paper concludes by offering avenues for future research.

Information technology implementers' responses to user resistance: nature and effects

Abstract: User resistance has long been acknowledged as a critical issue during information technology implementation. Resistance can be functional when it signals the existence of problems with the IT or with its effects; it will be dysfunctional when it leads to organizational disruption. Notwithstanding the nature of resistance, the implementers--business managers, functional managers, or IT professionals--have to address it. Although the literature recognizes the importance of user resistance, it has paid little attention to implementers' responses--and their effect--when resistance occurs. Our study focuses on this phenomenon, and addresses two questions: What are implementers' responses to user resistance? What are the effects of these responses on user resistance? To answer these questions, we conducted a case survey, which combines the richness of case studies with the benefits of analyzing large quantities of data. Our case database includes 89 cases with a total of 137 episodes of resistance. In response to our first research question, we propose a taxonomy that includes four categories of implementers' responses to user resistance: inaction, acknowledgment, rectification, and dissuasion. To answer our second question, we adopted a set-theoretic analysis approach, which we enriched with content analysis of the cases. Based on these analyses, we offer a theoretical explanation of how implementers' responses may affect the antecedents that earlier research found to be associated with user resistance behaviors.

On the Forecasting Accuracy of Multivariate GARCH Models

Abstract: This paper addresses the question of the selection of multivariate GARCH models in terms of variance matrix forecasting accuracy with a particular focus on relatively large scale problems. We consider 10 assets from NYSE and NASDAQ and compare 125 model based one-step-ahead conditional variance forecasts over a period of 10 years using the model confidence set (MCS) and the Superior Predicitive Ability (SPA) tests. Model per- formances are evaluated using four statistical loss functions which account for different types and degrees of asymmetry with respect to over/under predictions. When consid- ering the full sample, MCS results are strongly driven by short periods of high market instability during which multivariate GARCH models appear to be inaccurate. Over rel- atively unstable periods, i.e. dot-com bubble, the set of superior models is composed of more sophisticated specifications such as orthogonal and dynamic conditional correlation (DCC), both with leverage effect in the conditional variances. However, unlike the DCC models, our results show that the orthogonal specifications tend to underestimate the conditional variance. Over calm periods, a simple assumption like constant conditional correlation and symmetry in the conditional variances cannot be rejected. Finally, during the 2007-2008 financial crisis, accounting for non-stationarity in the conditional variance process generates superior forecasts. The SPA test suggests that, independently from the period, the best models do not provide significantly better forecasts than the DCC model of Engle (2002) with leverage in the conditional variances of the returns.

From Field Notes, to Transcripts, to Tape Recordings: Evolution or Combination?

Abstract: For researchers doing qualitative research, interviews are a commonly used method Data collected through interviews can be recorded through field notes, transcripts, or tape recordings In the literature, there is a debate regarding which of these recording methods should be used There are issues of reliability, cost (time and money), loss of data, among others Technology plays a pivotal role in this debate Indeed, new technologies (eg, direct coding) are often seen as potential replacements for older technologies (eg, transcripts), which leads to a debate that is based on an evolution narrative (from field notes, to transcripts, to working from tape recordings) This article argues that a combination narrative should be considered where combination is better than substitution Moreover, combining the advantages of field notes, transcripts, and working from tape recordings without accumulating each method’s disadvantages is possible because of new technology To support this argument, two technological tools (OneNote and Smartpen) are presented as a way to increase the effectiveness, efficiency, and economy of qualitative data management

Standardization as Institutional Work: The Regulatory Power of a Responsible Investment Standard

Abstract: This paper conceptualizes standardization as institutional work to study the emergence of a standard and the deployment of its regulatory power. We rely on unique access to longitudinal archival data for exploring how the FTSE4Good index, a responsible investment index, emerged as a standard for socially responsible corporate behavior. Our results show how three types of standardization work – calculative framing, engaging and valorizing – support the design, legitimation and monitoring processes whereby a standard acquires its regulatory power. Our findings reveal new facets in the dynamics of standardization by approaching standardization as a product of institutional work and in showing how unintended consequences of that work can be recaptured to strengthen the regulatory power of the standard.

Consistency in multi-vehicle inventory-routing

Abstract: Inventory-routing problems (IRPs) arise in vendor-managed inventory systems. They require jointly solving a vehicle routing problem and an inventory management problem. Whereas the solutions they yield tend to benefit the vendor and customers, solving IRPs solely based on cost considerations may lead to inconveniences to both parties. These are related to the fleet size and vehicle load, to the frequency of the deliveries, and to the quantities delivered. In order to alleviate these problems, we introduce the concept of consistency in IRP solutions, thus increasing quality of service. We formulate the multi-vehicle IRP, with and without consistency requirements, as mixed integer linear programs, and we propose a matheuristic for their solution. This heuristic applies an adaptive large neighborhood search scheme in which some subproblems are solved exactly. The proposed algorithm generates solutions offering a good compromise between cost and quality. We analyze the effect of different inventory policies, routing decisions and delivery sizes.

Triggers and barriers to financial inclusion: The use of ICT-based branchless banking in an Amazon county

Abstract: Financial inclusion can be defined as the access to formal financial services at an affordable cost for all members of an economy, favoring mainly low-income groups. It has been recognized as a critical element in policies for poverty reduction and economic growth. Some successful experiences with financial inclusion reported in developing countries are associated with the use of information and communication technology (ICT)-based branchless banking. One of these experiences is the Brazilian correspondent model, an ICT-based network responsible for delivering financial services to tens of millions of poor Brazilians, most of them having no other way to access banking services. This article presents a case study of financial inclusion in Autazes, a county in the Amazon region not served by banks until 2002, when a correspondent started its operations there. Since then, Autazes has experienced economic and social changes, due in part to government social benefits and other banking services delivered at the local level. The results of our field study in Autazes suggest that financial inclusion through the correspondents' process positively contributes to local socio-economic development but, at the same time, presents clear negative signs such as low-income population over-indebtedness, reproduction of social exclusion practices and reinforcement of power asymmetries. We conclude that although access to financial resources is a fundamental way to promote local development to low-income population, such access should be accompanied by other inclusive mechanisms like financial education in order to be effective.

Toward a new theory of the contribution of the it function in organizations

Abstract: Because changes in organizations and information technology environments are enduring, the alignment of the IT function with business objectives must not only be understood, but constantly renewed and adjusted. This is amply reflected in recent surveys of CIOs, which consistently suggest that the notion of alignment is a top challenge and management priority. Many CIOs face a double challenge when addressing the issue of alignment: they must first clarify top management's expectations and assumptions about IT, which may be contradictory, and then understand their implications for how the IT department should be managed (i.e., translate the function's strategic mission into an IT management model that adds value to the organization). The characterization of the IT function has constituted a central and growing subject of research in the information systems field. Although the extant literature has much to teach us, knowledge in this area is nevertheless fragmented and has not been properly integrated. In response to these limitations, this study proposes and tests a new theory of the contribution of the IT function. Specifically, our objective is to offer an explanation of the contribution of the IT function in organizations with a typology of ideal profiles. A field study was conducted in 24 large Canadian companies in order to validate a set of research propositions. Our results first suggest that there are five distinct "ideal" IT management profiles in organizations and each of these profiles tends to focus on specific sources of value. Next, we observed that IT functions that are close to the ideal of any given profile seem to be outperforming those with hybrid profiles. Finally, our findings provide a compelling explanation as to how ideal IT management profiles are adopted in organizations. The article concludes with a discussion of the theoretical and practical implications of the proposed theory.

The impact of political connections on firms’ operating performance and financing decisions

Abstract: We investigate the impact that the political connections of publicly traded firms have on their performance and financing decisions. Using a long-term event study covering a sample of 234 politically connected firms headquartered in 12 developed and 11 developing countries from 1989 to 2003, we find that firms increase their performance and indebtedness after the establishment of a political connection. We also find that the political connection is more strongly associated with changes in leverage and operating performance for firms with closer ties to political power. Overall, our study confirms that politically connected firms gain easier access to credit and reap benefits in terms of performance from their ties with politicians.

Political Connections and the Cost of Equity Capital

Abstract: Motivated by recent research on the costs and benefits of political connection, we examine the cost of equity capital of politically connected firms. Using propensity score matching models, we find that politically connected firms enjoy a lower cost of equity capital than their non-connected peers. We find further that political connections are more valuable for firms with stronger ties to political power. In additional analyses, we find that the effect of political connection on firms’ equity financing costs is influenced by the prevailing country-level institutional and political environment, and by firm characteristics. Taken together, our findings provide strong evidence that investors require a lower cost of capital for politically connected firms, which suggests that politically connected firms are generally considered less risky than non-connected firms.

Evaluating passenger robustness in a rail transit network

Abstract: The purpose of this paper is to provide passenger robustness measures for a rail transit network. A network is robust when it reacts well to disruptions on links or stations. In order to measure robustness, indexes relative to the overall travel time of a network when links fail are introduced for two different cases: without-bridging interruptions and with-bridging interruptions. In the first case, passengers either have to wait for the failure to be repaired or find an alternative route in the network, whereas in the second case a bus service between the affected stations is provided and only the failing link is disrupted. A computation of these indexes for the Madrid commuter system shows their applicability.

Do Return Prediction Models Add Economic Value

Abstract: We compare statistical and economic measures of forecasting performance across a large set of stock return prediction models with time-varying mean and volatility. We find that it is very common for models to produce higher out-of-sample mean squared forecast errors than a model assuming a constant equity premium, yet simultaneously add economic value when their forecasts are used to guide portfolio decisions. While there is generally a positive correlation between a return prediction model’s out-of-sample statistical performance and its ability to add economic value, the relation tends to be weak and only explains a small part of the cross-sectional variation in different models’ economic value.

Enterprise logic: explaining corporate attention to stakeholders from the ‘inside-out’

Abstract: Why are some firms more effective than others at addressing stakeholder concerns? Conventional stakeholder theories focus on variables in the external environment and cannot adequately explain variance across firms operating in the same context. Our matched-pair study of eight global corporations goes inside the firm and investigates the role of managerial cognition on corporate attention to stakeholders. We find that top management's conceptualization of the firm's relationship with society—which we name enterprise logic—prompts distinct foci of attention and potentially constrains how well a single firm can simultaneously attend to multiple stakeholders. These findings highlight the value of an ‘inside-out’ perspective, centered on managerial cognition, in explaining why some firms address stakeholder concerns more effectively than their peers. Copyright © 2012 John Wiley & Sons, Ltd.

Whether and How Virtual Try-On Influences Consumer Responses to an Apparel Web Site

Abstract: Lack of direct experiential information is part of the explanation as to why only a small portion of apparel sales are performed online. To alleviate this problem, there are several forms of virtual experience that assist consumers in evaluating apparel online. Particularly significant among such virtual experiences are those facilitated by image interactivity technology (IIT). This paper focuses on one form of IIT, the "virtual try-on" (VTO), and analyzes whether and, if so, how using a virtual 3D model to try on clothes influences cognitive, affective, and conative responses to a retail Web site. Our comparison of personalized VTO with nonpersonalized VTO and mix-and-match technology in a laboratory-controlled environment shows that VTO does not lead to greater influence over consumer responses per se. We underline the utmost importance of model self-congruity and body esteem in increasing the impact of VTO on these responses. Hence, apparel Web sites proposing VTO, as well as companies providing these solutions, should focus on ways to efficiently maximize the perceived resemblance between the consumer and the model. By introducing body-related constructs such as body esteem and perceived model self-congruity, this study augments prior research on IIT by proposing and validating the underlying mechanism by which VTO influences consumer responses.

Robust Inventory Routing Under Demand Uncertainty

Abstract: This paper introduces a robust inventory routing problem where a supplier distributes a single product to multiple customers facing dynamic uncertain demands over a finite discrete time horizon. The probability distribution of the uncertain demand at each customer is not fully specified. The only available information is that these demands are independent and symmetric random variables that can take some value from their support interval. The supplier is responsible for the inventory management of its customers, has sufficient inventory to replenish the customers, and distributes the product using a capacitated vehicle. Backlogging of the demand at customers is allowed. The problem is to determine the delivery quantities as well as the times and routes to the customers, while ensuring feasibility regardless of the realized demands, and minimizing the total cost composed of transportation, inventory holding, and shortage costs. Using a robust optimization approach, we propose two robust mixed integer programming (MIP) formulations for the problem. We also propose a new MIP formulation for the deterministic (nominal) case of the problem. We implement these formulations within a branch-and-cut algorithm and report results on a set of instances adapted from the literature.

Performance management effectiveness: practices or context?

Abstract: Although much research has focused on the technical or measurement issues involved in employee performance management, this study investigates the mutual influence of practices and context on performance management effectiveness. From a sample of 312 private and public sector organizations with 200 or more employees, the results indicate positive associations between practices – training and employee recognition – and performance management effectiveness. They further underscore the relevance of three contextual variables – culture, climate and the strategic integration of human resource management – as they are also related to more positive performance management outcomes. Implications for research and practice are discussed.