INFORMAL COMMENTS REGARDING THE ICIS
AWARD AND THE DISSERTATION:
What did you win?
I was one of two students who were
awarded the Best Dissertation Award from the International Conference of Information
Systems, presented in Brisbane, AU, for all MIS dissertations published
worldwide during the year 1999‑2000 academic year.
Why did you select the topic that you
studied?
My research sits at the intersection of
economics and information systems. I was
really interested in exploring a situation where events observed in the real
world did not fit with what was predicted by the theory of the MIS discipline‑
I could not reconcile some anecdotal evidence about companies with our
theorized behavior of things. In this
research, we wondered if certain kinds of companies were behaving in ways that
were not in line with what we had expected to see, based upon some generally
accepted ideas in the MIS field. I
became very interested in studying information goods intense producing kinds of
companies because these firms do not seem to fit the usual rules or patterns
that most firms must follow. Information
goods firms are really kind of odd entities when compared to regular
firms. Once an information good producer
creates its first product, all of the subsequent products can be produced for a
very low marginal production cost in many cases. For example, once Microsoft creates and
produces that first copy of Office 2000 software, all of the rest of the software
copies are really inexpensive to make‑ maybe costing only pennies. On the other hand, General Motors must use
physical inputs like steel and tires to produce its first car in a model line,
and it still must use steel and tires in that last car in the model line. Maybe digital goods have different economic
drivers in terms of how they organize firms in markets?
What did you study?
Because of the unusual economics of
making and selling information goods, we studied if successful information
goods producing firms have a tendency to become larger and larger, expanding
their firm boundaries by entering into more and more alliances with other
firms. Indeed, we found that information
goods intense firms are significantly more likely to expand their boundaries
through alliances than other types of companies. We also looked at another problem as well,
that of the role of information technology in firm boundary expansion. We found that information goods producing
firms and regular firms, both with more extensive deployments of information
technology were significantly more likely to enter into both horizontal and
vertical alliances. This implies that we
may be seeing the development of the long hypothesized electronic markets in
terms of how firms organize their industrial structures because of the use of
information technology in the value chain.
These technology‑based alliances may be for manufacturing and
distributing products, or for marketing products to consumers. An interesting finding was that we may be
seeing new developments in not only vertical electronic markets- but
also in horizontal electronic markets, which is a new contribution to
MIS theory. In fact, it seems that firms
with high information technology deployments may favor alliances over mergers
for horizontal expansionary behavior.
Maybe IT allows people to communicate and exchange information in ways
that allow companies to not need to own lots of subsidiaries any more, but
rather in ways that use technology to link together with other firms to get the
job done.
What contributed to the winning of the
ICIS award?
The award was won due to the strength
and quality of my dissertation committee at Pitt, in particular because of the
methodological and theoretical contributions of Dr. Irene Hanson Frieze of
Psychology and Katz and Dr. William R. King of Katz. The strengths of the dissertation are
twofold. First, the theoretical model
separated the economic drivers for merging and allying into vertical and
horizontal factors, thus adding to the traditional transaction cost literature,
with its limitations of focusing only on the vertical dimensions of transaction
costs. Secondly, the research rested on
an extensive data and unusual collection for 317 large, publicly held
companies. We collected an astonishing
reliable and valid database of information about large firms and their
expenditures on information technology, usually proprietary information, as
well as data on two years of merger and alliance activity for these firms,
contained in over 13,000 articles about our firms as found in a computerized
search of the Wall Street Journal database.
What will you look at next?
The question that the researchers (Dr.
Irene Hanson Frieze of Psychology and Katz and Dr. William R. King of Katz, as
well as myself) are exploring now is if successful
information goods firms also tend to be more profitable because of these
unusual economics, all else being equal.
If an information goods intense producing firm can replicate its
products for a very low marginal cost, once a market is captured, is that firm
able to earn at increasing returns to scale?
Are firms that produce bits better able to make money, all else equal,
than firms that make physical goods?
Does this occur only after a “tipping point” is achieved?
Is this related to electronic commerce
in any way?
It may be that the .com stock market
bubble was related to people intuitively suspecting that some firms, maybe
information goods producers, were capable of realizing increasing returns, while
other firms were not. One wonders if the
future, successful electronic commerce companies will be those that market pure
bits, digital products, rather than those that market atoms, or physical goods. This would mean that perhaps a firm like
Amazon.com that sells books might not be as successful as a firm like Barnes
and Noble.com. Barnes and Noble is
aggressively pursuing a strategy of selling fully digital electronic books in
the future, while Amazon.com has moved to a strategy of selling chain saws and
garden tools.
Tell me more about yourself.
I am an Assistant Professor of MIS
(Management of Information Systems) at the