Journal ArticleDOI
Strength in Numbers: How Does Data-Driven Decisionmaking Affect Firm Performance?
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Evidence that the effect of DDD on the productivity do not appear to be due to reverse causality is found, providing some of the first large scale data on the direct connection between data-driven decision making and firm performance.Abstract:
We examine whether firms that emphasize decision making based on data and business analytics (“data driven decision making” or DDD) show higher performance. Using detailed survey data on the business practices and information technology investments of 179 large publicly traded firms, we find that firms that adopt DDD have output and productivity that is 5-6% higher than what would be expected given their other investments and information technology usage. Furthermore, the relationship between DDD and performance also appears in other performance measures such as asset utilization, return on equity and market value. Using instrumental variables methods, we find evidence that the effect of DDD on the productivity do not appear to be due to reverse causality. Our results provide some of the first large scale data on the direct connection between data-driven decision making and firm performance.read more
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References
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Book
Working Knowledge: How Organizations Manage What They Know
TL;DR: The definitive primer on knowledge management, this book will establish the enduring vocabulary and concepts and serve as the hands-on resource of choice for fast companies that recognize knowledge as the only sustainable source of competitive advantage.
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Innovation and Learning: The Two Faces of R & D
TL;DR: In this paper, the authors assume that firms invest in R&D not only to generate innovations, but also to learn from competitors and extraindustry knowledge sources (e.g., university and government labs).
Journal ArticleDOI
Structural Inertia and Organizational Change
Michael T. Hannan,John Freeman +1 more
TL;DR: In this paper, the authors consider structural inertia in organizational populations as an outcome of an ecological-evolutionary process and define structural inertia as a correspondence between a class of organizations and their environments.
Journal ArticleDOI
The Search-Transfer Problem: The Role of Weak Ties in Sharing Knowledge across Organization Subunits.
TL;DR: In this article, the authors combine the concept of weak ties from social network research and the notion of complex knowledge to explain the role of weak links in sharing knowledge across organization subunits.