Fox School of BusinessIdea Marketplace

shutterstock_146356064While money can’t buy happiness, access to technology is capable of producing that very result, researchers from Temple University’s Fox School of Business found.

The team of Fox School researchers examined the role played by information and communication technology (ICT), uncovering a link between it and personal well-being. Their research paper, titled, “Does information and communication technology lead to the well-being of nations? A country-level empirical investigation,” has been accepted for upcoming publication by top academic journal, MIS Quarterly.

Kartik Ganju, Fox School PhD candidate; Dr. Paul A. Pavlou, Milton F. Stauffer Professor of Management Information Systems; and Dr. Rajiv D. Banker, Merves Chair in Accounting and Information Technology comprised the Fox research team.

The team argued that the adoption of ICT by countries leads to an increase in levels of well-being of its citizens, and that doing so helps citizens develop social capital and achieve social equality.

The Fox research team grouped 110 countries into three categories (low ICT, medium ICT and high ICT). The researchers found that countries with low levels of ICT could increase the happiness levels of their citizens by giving them access to mobile telephone lines. Hence, countries with low levels of ICT may not have to invest in expensive fixed line networks to increase the level of their citizens’ happiness, but could “leap-frog” the adoption of these systems in favor of mobile telephones, to increase happiness.

Using the results of a Gallup World Poll survey, which measured the global well-being of individual nations, Fox researchers found that the adoption of ICT led to an increase in the well-being of its citizens. Moreover, they found that access to ICT gave individuals a voice, “and an opportunity to communicate with others like themselves,” Ganju said. ICT also impacted the health of a nation’s people, with newfound access to proper healthcare practices, the team said. The researchers also cited access to education and real-time information that ICT affords as additional benefits.

“Most people assume that by giving an individual a certain amount of money that you can make him or her happier, and we found that this is not the case,” Ganju said. “We found that it is not just the income of GDP of a country that renders happiness. Access to information and communication technology allows people to feel an interconnected bond with each other than cannot obtain with money.”

“Suddenly, people were being exposed to different markets and rates. This allowed them to better bargain and achieve more-favorable pricing scenarios,” said Pavlou, Fox School’s Associate Dean of Research, Doctoral Programs and Strategic Initiatives. “Regardless of a particular nation’s gross-domestic product, access to technology can amplify that country’s productivity and the well-being of its people,” Pavlou added. “ICT works to even the playing field between the wealthiest and poorest of nations.”

Photo of  Attendees listen to Google Chief Economist Hal Varian, one of many premier panelists at the Fox School’s Privacy in an Era of Big Data Workshop.
Attendees listen to Google Chief Economist Hal Varian, one of many premier panelists at the Fox School’s Privacy in an Era of Big Data Workshop.

Google “big data,” and the first search result returns the word, “dangerous.”

The irony of using a big data factory to discover the risks of its own data was not lost on researchers and experts attending the Privacy in an Era of Big Data workshop, funded by the National Science Foundation (NSF) and hosted by the Fox School of Business and Temple University’s Big Data Institute.

“Big data” is loosely defined as the collection and analysis of large data sets of complex information. As the scope of collected data increases, there is a significant need for advanced analytic techniques and the development of new methods of investigation. Temple’s Big Data Institute was established to harness the full potential of big data and enable further research on the subject with an interdisciplinary approach by bringing together seven related research centers across the university and the Fox Chase Cancer Center.

Co-founder of the Institute Dr. Paul A. Pavlou, Chief Research Officer and Associate Dean of Research, Doctoral Programs, and Strategic Initiatives, along with Dr. Sunil Wattal, Director of the Center on Web and Social Media Analytics and Associate Professor of Management Information Systems, were awarded a grant from the NSF to further their investigation into unexplored links between big data and privacy.

“This is a topic that’s on everyone’s minds, and we’re here to get some useful insight on it,” Wattal said.

The workshop, held April 22-23, was a part of a weeklong event to encourage big data research from industry, government, and academia on the future of big data and privacy. The goal of the workshop, Pavlou said, was “to create a forward-looking research agenda into the future of big data.”

A priority for attendees was establishing the balance of big data with privacy rights, in order to improve national security and further develop consumer marketing. Dr. Thomas Page, Technical Director for Core Infrastructure & Cloud Repositories at the National Security Agency, represented the government perspective on big data, with a keynote presentation.

“There’s a moral responsibility in this space. We’re doing this on behalf of the American people,” Page said.

Page called for a new focus when discussing big data. “Big Smart Data,” he said, avoids unnecessary or intrusive information from reaching analysts, and allows new public policy to be enacted that balances personal privacy and national security concerns.

Page’s keynote address raised concerns of a “zero sum game,” wherein consumers trade privacy for national security. Christina Peters, Chief Privacy Officer at IBM, noted that she believes the two are not equivalent. Citing instances of security breaches at Target and Home Depot, she indicated how a history of misuse or neglect has risked consumer information.

Hal Varian, Chief Economist at Google, discussed the trust contract held between consumers and big data collectors. He argued that big data factories have the most to lose. “Search engines have a lot more to lose than a human. When computers screw up they screw up big,” Varian said.

Google’s top search results for “how do I know” are: “if I’m pregnant,” “if I’m gay,” and “if I have AIDS,” all of which, Varian said, demonstrate Google’s desire to not only share a vast amount of information, but to also take seriously its responsibility as an online confidante.

“Search engines are the biggest privacy enhancers in the world. People won’t ask these questions to their lawyer, doctor, parents, or priest. This is the first time you can get this type of answer from a non-human,” said Varian, who also served as the featured keynote speaker at the Frederic Fox Lecture Series April 23, another event during Big Data Week.

Varian explained that the intended use of big data is to educate consumers on the difference between privacy and security. Since privacy is the restricted use of personal information, a responsibility of big data should be to protect the security of the data and manage the risks associated with personal data analytics.

A closing comment from the first day of the workshop was the idea that “big data is the new bacon,” as presented by Lael Bellamy, Chief Privacy Officer at The Weather Channel. Her support of improved data collection and consumer intelligence reinforced the notion that although big data is trending, it’s been around for a long time.

“It’s possible everyone can benefit from the Big Data revolution,” said Carnegie Mellon University professor Dr. Rahul Telang.

The bar graph is dead.

It’s a bygone relic of an era intimidated by 1.28 billion Facebook members and 3 billion computer users globally. These numbers are not as daunting as they once were; rather, they are now the tools used to determine anything from favorite food to political preference.

This is big data, the new face of statistical and computational analysis.

Big data is the collection of data sets so large that it is difficult to process them with traditional methods. As the volume, velocity and variety of these sets increases, so does the need for informed analytics.

The Fox School of Business created the Big Data Institute for just this purpose.

In existence for more than a year, and with the assistance of seed money provided by Temple University Provost Hai-Lung Dai, the Big Data Institute strives to blend several programs and encourage natural synergies among big data researchers, students and firms, while seeking to become a global leader in research, education, industry practice, and technology transfer of big data.

For Dr. Paul A. Pavlou, Senior Associate Dean of Research, Doctoral Programs, and Strategic Initiatives at the Fox School of Business, the Institute represents a year of work supporting students and professors engaged with large data.

“The amount of data created in just an hour or minute is tremendous. We need new techniques and approaches to make sense of this data,” Pavlou said.

The Institute has five centers with individual specializations that include big data usage in mobile analytics, social media, health sciences, oncology research, statistics and biomedical informatics. These centers have used big data to connect brain imaging to successful advertisements, to use technology to create vast amounts of DNA for clinical study, and, in the School Tourism Hospitality and Management, to decrease dissatisfaction in the leisure industry, among other research projects.

“One of the unique advantages we have is that the Statistics department is housed in Fox. We try to leverage that to have different conversations,” Pavlou said.

The Institute and its centers are funded by data enthusiasts from Temple University, the federal government, affiliated firms and commercial groups, as well as start-ups the Institute helped get off the ground. With the aid of these associates, and partners in the private sphere, the Institute seeks to continue its research into cutting-edge data analysis.

In its pursuit of this goal, the Institute’s Center for Web and Social Media Analytics has capitalized on the data generated each minute from the 74 percent of adults using social media.

For Dr. Sunil Wattal, Associate Professor of Management Information Systems (MIS), this data is critical. “There is not a whole lot of awareness of what firms can do with social media,” Wattal said. “The Center provides firms with a way to quantify the value of social media and use the data to derive some interesting insights about their business.”

The Center logs onto social media to help firms such as Aerospace to understand consumer tendencies at the microscopic level. Combing through Twitter or flicking through Instagram, the Center decrypts consumer preferences for the latest fitness craze to political party affiliation. This data is then synthesized into something that anyone, from pollsters to yogis, can use to further their goals.

A key area of research, said Wattal, is how a crowdfunding organization can convince more people to donate to campaigns. Chief among the Center’s findings is that, contrary to the belief that Internet popularity grows exponentially, the more popular a campaign, the less likely it is to receive more funding. Working with a particular company, the Center has proposed design changes to combat this issue.

“There’s a community that gets created on these sites, and you can measure how people influence each other,” said Wattal.

In 2015, the Center will use funds received from the National Science Foundation (NSF) to host a big data and privacy conference, bringing together federal agencies, online giants such as Google, and interested parties to discuss personal privacy in the Big Data age.

To keep students abreast of the latest in data analysis, the Fox School’s MIS department has introduced its newest university-wide course, Data Science. It is available to all students and has allowed business students to improve their data usage in the business world.

“We’re constantly surrounded by data. If you can get the average employee to take this data and get some insight on their own you can give them an advantage over the rest,” said Dr. David Schuff, Associate Professor of MIS and instructor for the Data Science and Data Analytics courses.

Schuff said he begins with the basics – teaching business majors and minors in his Data Analytics course how to use data-mining software, like SAS Enterprise Miner, to examine data and identify its pertinent characteristics.

“We want them to be able to look at cause-effect relationships in business data and use some basic tools to analyze that data and use the results to make better decisions,” Schuff said.

Using the basic skills Schuff teaches, students can use data to examine consumer preferences, such as using sales receipts to predict which goods are bought in tandem and how strategic sales can maximize profits. Broadening the scope, if politicians want to know a Facebook friend’s electoral value, they need someone who can use big data to decipher the sentiment behind a Facebook post. For Schuff, this person is someone who is, “comfortable with data,” and can fuse tools gleaned in business classes to decode the human psyche.

Data professionals “know what you can do with data and so they know how to support the marketing function. These people aren’t going to be just data scientists, …but business people who are working with data,” Schuff said.

Schuff aims for his students to move beyond the bar graph- and pie chart-models to create and analyze more sophisticated visualizations to better integrate data in their professional lives. These students get hands-on experience using SAS products, as well as Tableau software, both of which are currently used in the analytics industry.

“We really want people to touch the tools they would be using in industry so they can speak from experience,” Schuff said.

The National Science Foundation (NSF) has awarded Temple University’s Fox School of Business with a $50,000 grant, with which the School will fund a workshop workshop is to bring together experts in the domain of big data and privacy to develop a research agenda for better understanding and promoting privacy in an era of big data. The “Privacy in an Era of Big Data Workshop”(please link to fox.temple.edy/nsfworkshop) will take place at the university on April 22 and 23 of this year. Government officials, industry leaders, and notable academics will meet to discuss privacy issues surrounding big data, and to develop a forward-looking agenda for research on the legal, technological, social, behavioral, economic, and broader implications of Big Data and Privacy in academia, industry, and government.

Dr. Paul A. Pavlou, the Milton F. Stauffer Professor, as Principal Investigator, and Associate Professor of Management Information Systems Dr. Sunil Wattal, as Co-Principal Investigator, received the NSF grant. The objective of the NSF workshop is to demonstrate the merits in the pursuit of the potential for big data while respecting privacy rights.

In the proposal, Pavlou and Wattal argued that there are “unexplored links” between big data and privacy, and that the potential exists for breaches of privacy, particularly by corporations, malicious individuals or governments. The workshop, Pavlou and Wattal said, would unite individuals from multiple disciplines in an attempt to promote a “forward-looking agenda.”

“People often have very little control over the collection process, in terms of knowledge about what information is being collected and stored about them,” said Pavlou, a Co-Director of Temple’s Big Data Institute and the School’s Chief Research Officer. “They also are unaware of who has access to the information, and for what purpose the information will be used.

“Finding solutions to these big day and privacy problems must become a priority for this generation of interdisciplinary research.”

The NSF workshop will cover: the tradeoff between the benefits of big data and privacy protection; the legal, public policy and regulatory issues on privacy; privacy protection technologies; and social, behavioral and economical approaches to encouraging individual privacy practice.

Slated to take place in late Spring 2015, the workshop will be open to all centers that operate in conjunction with Temple’s Big Data Institute. Additionally, select global big-data experts from academia, industry, and government will be invited to attend. A date for the workshop has not yet been finalized.

Dr. Paul A Pavlou, the Milton F. Stauffer Professor of Information Technology and Strategy at the Fox School of Business, recently earned recognition as a world leader in scientific research.

Pavlou was named one of Thomson Reuters’ World’s Most Influential Scientific Minds, which published its list of highly cited researchers in June. Pavlou earned the distinction from the Intellectual Property and Science business branch of Thomson Reuters for citations of his work in a 10-year period, between 2002-2012.

The Associate Dean of Research and Chief Research Officer at the Fox School, Pavlou joined more than 3,000 fellow scholars across 21 fields of study for being among the world’s most-highly cited researchers in his or her specialty. Pavlou’s papers registered more than 13,000 citations over the last decade, as he became one of 95 Highly Cited researchers recognized by Thomson Reuters in the field of Economics & Business.

“I do research for my own motivation, because I like to discover new things,” Pavlou said, “but it is a great recognition that others rely on your work and cite your work.”

This is not the first such world-wide recognition of Pavlou’s research. He was rated as the world’s most-productive researcher in the two top management information systems journals MIS Quarterly and Information Systems Research, according to an analysis by the Association of Information Systems for the period 2010-2012.

Pavlou said he anticipates that his latest personal accolade, from Thomson Reuters, will render a double-edged impact at the Fox School. One of Pavlou’s goals, he said, is to continue to build Fox’s sterling reputation through highly cited, published papers from its students.

“I like to push the mentality that it’s not only (important) to get published, but to get published in well-read, well-respected journals,” he said. “Getting published by itself is not easy. But if you can take it to the next level and say, ‘This is something people will read and cite,’ that’s what I’m really trying to do.”

 

Dr. Paul A Pavlou, the Chief Research Officer and Associate Dean of Research at the Fox School of Business, recently earned recognition as a world leader in scientific research.

Pavlou was named one of the World’s Most-Influential Scientific Minds for 2014 by the Intellectual Property and Science business branch of Thomson Reuters, which published its list of honorees in June.

The Milton F. Stauffer Professor of Information Technology and Strategy at the Fox School, Pavlou joined more than 3,000 fellow scholars across 21 fields of study for being among the world’s most-highly cited researchers in his or her specialty. Pavlou’s papers registered more than 12,000 citations over the last decade, as he became one of 95 researchers honored by Thomson Reuters in the field of Economics & Business.

“I do research for my own personal motivation, because I like to discover new things,” Pavlou said, “but it is a great recognition that others rely on your work and cite your work.”

This is not the first such recognition of Pavlou’s research. In 2011, he was rated as the world’s most-productive researcher by top management information systems journals MIS Quarterly and Information Systems Research, according to an analysis by the Association of Information Systems for the period 2010-2012.

Pavlou said he anticipates that his latest personal accolade, from Thomson Reuters, will render a double-edged impact at the Fox School. One of Pavlou’s goals, he said, is to continue to build Fox’s sterling reputation through highly cited, published papers from its students.

“I like to push the mentality that it’s not only (important) to get published, but to get published in well-read, well-respected journals,” he said. “Getting published by itself is not easy. Some may say, ‘It got published. I don’t care if nobody cites it. It’s there.’ But if you can take it to the next level and say, ‘This is something people will read, publish, cite,’ that’s what I’m trying to do.”

Gaps in academic literature focusing on computer-mediated environments have been synthesized to offer potential for new research and design models.

Milton F. Stauffer Professor of Information Technology and Strategy Paul A. Pavlou, of Temple University’s Fox School of Business, and Macy’s Foundation Professor Manjit S. Yadav, of Texas A&M University, organized and synthesized academic research around four key interactions in CMEs: consumer-firm, firm-consumer, consumer-consumer and firm-firm.

Pavlou and Yadav synthesized 124 articles from four widely recognized journals — Journal of Marketing, Journal of Marketing Research, Marketing Science and Journal of Consumer Research — into specialized topics to identify gaps by juxtaposing current research with marketplace practices and emerging trends.

“Of course, in any literature, there are gaps.” Pavlou said. “This type of literature is very broad, and it’s natural for people to focus on what’s interesting and timely. That’s why there are gaps.”

Gaps found in consumer-firm interactions indicate the needs to understand that there are new shopping contexts that may be useful for categorization and research. The gaps also suggest that the structure of consumers’ shopping funnel — a large number of choices winnowed down to a final selection — needs to be examined more closely.

Furthermore, as little is known about how consumers navigate and integrate information from various types of devices and interfaces in CMEs, finer process models need to be developed, which would enhance consumer-firm interactions.

There are also gaps in theory development opportunities that affect firm-consumer interactions. In order to fill this, enhanced consumer visibility, which will allow firms to capture and detail consumers’ activities in CMEs, needs to be given a more central role in theory development. In doing so, a more integrated view can be provided of firms’ marketing activities across online and offline environments.

In terms of consumer-consumer interaction, gaps related to the growing interest in social commerce as well as the shift in the type of content generation that occurs in social networks need to be addressed. These gaps pave the way for three main avenues for theory development.

First, social commerce needs to be clarified to include purchase and non-purchase activities in social networks. Second, understanding the creation, consumption and dissemination of content in social networks should be an important priority. Third, theoretical work is needed that delineates the costs and benefits of consumers’ investments of time and effort on social media.

In order to address the gaps found in firm-firm interactions, research needs to focus more closely on concepts such as external and internal coordination that are important to transaction costs analysis and agency theory. This is because of the inter-organizational shifts due to emerging intermediaries in business-to-busines marketplaces, platform-based competition, and new types of reverse auctions.

By synthesizing literature, Pavlou and Yadav also yielded suggestions to develop methodological innovations as it pertains to new data, new designs and new models.

“Multiple parties can benefit from this research,” Pavlou said. “I see graduate students, PhD students and novices in the area getting the most benefit. It’s easier for them to read over a synthesis versus trying to synthesize over 100 papers to find gaps on their own.”

Pavlou and Yadav’s article, Marketing in Computer-Mediated Environments: Research Synthesis and New Directions, has been accepted for publication in the Journal of Marketng, an A journal.

Gaps in academic literature focusing on computer-mediated environments have been synthesized to offer potential for new research and design models.

Milton F. Stauffer Professor of Information Technology and Strategy Paul A. Pavlou, of Temple University’s Fox School of Business, and Macy’s Foundation Professor Manjit S. Yadav, of Texas A&M University, organized and synthesized academic research around four key interactions in CMEs: consumer-firm, firm-consumer, consumer-consumer and firm-firm.

Pavlou and Yadav synthesized 124 articles from four widely recognized journals — Journal of Marketing, Journal of Marketing Research, Marketing Science and Journal of Consumer Research — into specialized topics to identify gaps by juxtaposing current research with marketplace practices and emerging trends.

“Of course, in any literature, there are gaps.” Pavlou said. “This type of literature is very broad, and it’s natural for people to focus on what’s interesting and timely. That’s why there are gaps.”

Gaps found in consumer-firm interactions indicate the needs to understand that there are new shopping contexts that may be useful for categorization and research. The gaps also suggest that the structure of consumers’ shopping funnel — a large number of choices winnowed down to a final selection — needs to be examined more closely.

Furthermore, as little is known about how consumers navigate and integrate information from various types of devices and interfaces in CMEs, finer process models need to be developed, which would enhance consumer-firm interactions.

There are also gaps in theory development opportunities that affect firm-consumer interactions. In order to fill this, enhanced consumer visibility, which will allow firms to capture and detail consumers’ activities in CMEs, needs to be given a more central role in theory development. In doing so, a more integrated view can be provided of firms’ marketing activities across online and offline environments.

In terms of consumer-consumer interaction, gaps related to the growing interest in social commerce as well as the shift in the type of content generation that occurs in social networks need to be addressed. These gaps pave the way for three main avenues for theory development.

First, social commerce needs to be clarified to include purchase and non-purchase activities in social networks. Second, understanding the creation, consumption and dissemination of content in social networks should be an important priority. Third, theoretical work is needed that delineates the costs and benefits of consumers’ investments of time and effort on social media.

In order to address the gaps found in firm-firm interactions, research needs to focus more closely on concepts such as external and internal coordination that are important to transaction costs analysis and agency theory. This is because of the inter-organizational shifts due to emerging intermediaries in business-to-busines marketplaces, platform-based competition, and new types of reverse auctions.

By synthesizing literature, Pavlou and Yadav also yielded suggestions to develop methodological innovations as it pertains to new data, new designs and new models.

“Multiple parties can benefit from this research,” Pavlou said. “I see graduate students, PhD students and novices in the area getting the most benefit. It’s easier for them to read over a synthesis versus trying to synthesize over 100 papers to find gaps on their own.”

Pavlou and Yadav’s article, Marketing in Computer-Mediated Environments: Research Synthesis and New Directions, has been accepted for publication in the Journal of Marketng, an A journal.

—Alexis Wright-Whitley

Despite a 7.2 percent national unemployment rate, the job market is a healthy one for college students majoring in information systems, with nearly three quarters of students receiving at least one job offer, according to the nationwide IS Job Index by the Association for Information Systems (AIS) and Temple University’s Fox School of Business. The study compiled data from more than 1,200 students and from 48 universities across the United States.

According to the IS Job Index, released in October, 61 percent of information systems graduates received one job offer, while 23 percent received two and 9 percent received three. In 2012, there were an estimated 2.9 million jobs in the United States related to information systems.

“Information systems professionals lead IT in major corporations, but the IS labor market is ‘hidden’ because it is mixed with computer scientists and call center operators in national statistics,” said Munir Mandviwalla, associate professor and chair of the Department of Management Information Systems at the Fox School of Business and executive director of Temple’s Institute for Business and Information Technology (IBIT). “The IS Job Index is the first-ever nationwide study to focus on profiling the IT worker of the future.”

Top findings include:

▪   The IS job market is healthy, with placement levels of 74 percent overall and 78 percent upon graduation.

▪   Bachelor’s IS students have an average salary of $57,212 while master’s IS students average $65,394 a year.

▪   76 percent of IS graduates are satisfied with their jobs, and the same percentage are confident they will perform well in those jobs. Seventy-three percent found jobs related to their chosen degree.

▪   Information technology, financial services, and business services/consulting are the top industries for IS jobs.

▪   The most common job classification is systems analyst, at 35 percent for bachelor’s students and 28 percent for master’s students.

▪   Access to career services centers is the most important factor for getting a job. Also, IS students value faculty support more than central university support.

▪   IS students are 68 percent male, 55 percent white and 28 percent Asian.

The study found that students who spend more hours overall searching for a job have a higher chance of receiving an offer. When examining job-search activities, researchers found that the most successful students use multiple techniques, including looking for jobs on job boards, talking to friends and contacts, formally applying for jobs, directly contacting employers, and interviewing.

Students also apply for multiple jobs. Bachelor’s students, on average, apply for 11 jobs, and master’s students average 16 job applications.

Despite the amount of opportunity for IS students, women and minorities are still underrepresented in the field. The study shows that more than half of IS students are white men.

The AIS-Temple Fox School 2013 IS Job Index Report is a five-year ongoing project that will provide prospective and current students, guidance counselors, academics and managers with an analysis of the state of the industry.

Future reports are expected to include expanded data collection with more schools, longitudinal analysis, global focus and prioritized factors that top students seek in employers.

AIS is the world’s premier professional association for information systems. The Fox School of Business research team included Mandviwalla, Crystal M. Harold, assistant professor of human resource management and CIGNA research fellow; Paul A. Pavlou, Milton F. Stauffer professor of information technology and strategy; and Tony Petrucci, assistant professor of human resource management. For more information, including a link to the full report, visit http://ibit.temple.edu/isjobindex/

Alexis Wright-Whitley

 

It’s become clear in the business world that IT is no longer just a function of a company, but a key player in the business strategy of a company.  Upon closer look, it became more prominent in successful companies that the business strategy is driven by an IT strategy.  Digital Business Strategy looks into that intersection between information systems and strategy and how they align to create a complete plan for a company.  It drives questions such as: How does IT increase value to a company? And how can IT be used creatively to improve the way companies function?

Despite the reputation of online marketplaces being distant and impersonal, through social technologies such as instant messaging, they can create the sense of personal and social relationships between buyers and sellers, termed “swift guanxi” in China, to facilitate loyalty, interactivity and repeat transactions, according to new research by Temple University Fox School of Business Professor Paul A. Pavlou.

Three researchers – in addition to Pavlou, Tilburg University’s Carol Xiaojuan Ou and Robert M. Davison of the City University of Hong Kong – studied data from TaoBao, China’s leading online marketplace, to examine the efficacy of using computer-mediated-communication (CMC) technology to build guanxi and turn impersonal one-time shoppers into loyal and committed long-term customers through personal rapport.

Guanxi is a Chinese concept “broadly defined as a close and pervasive interpersonal relationship” and “based on high-quality social interactions and the reciprocal exchange of mutual benefits,” Ou, Pavlou and Davison wrote.

In the past, online shoppers have been presumed to prefer impersonal transactions, but their study argues that both retailers and customers inherently desire the kind of relationship that can be called guanxi, even if the degree and extent of communication varies by culture. For example, in China, communication before a transaction of a few dollars could take more than 45 minutes.
“Nobody would argue that personal relationships are unimportant, but it is unfathomable that people in the U.S. would engage in such extensive communications and personal interactions for a small transaction,” said Pavlou, the Fox School’s Milton F. Stauffer Professor of Information Technology and Strategy.

The instant messaging technology used on TaoBao allows buyers and sellers to interact immediately and to use emoticons and avatars in the negotiation and verification of the transaction details. In addition, all of the customers’ messages related to a specific product are shown in a message box. Finally, the feedback system provides users with textual and numerical evaluations of buyers and sellers that further establish rapport.

“The role of CMC tools in establishing swift guanxi via interactivity, presence, and trust, suggests that buyer-seller interaction can easily and quickly transform strangers into acquaintances,” the researchers wrote. “In terms of repeat transactions, the effective use of CMC tools creates a significant opportunity for online sellers who wish to reinforce swift guanxi with buyers via building buyers’ trust.”

With the use of CMC tools (such as instant messaging, message boxes and feedback), TaoBao has achieved a loyalty rate, or “stickiness,” of 71.3 percent of its customer base – the kind of loyalty that is typically associated with only brick-and-mortar retailers.

Guanxi, largely enabled by CMC tools, can help explain the success of Taobao in China despite eBay’s attempts to capture China’s online market with eBay China (EachNet).  Currently Taobao has 96 percent market share in China compared to 0.1 percent for EachNet.

Pavlou explained the significance of the study’s findings by citing an April 2000 article in The Economist that said: “If you don’t have the patience to learn about guanxi, old boy, you might as well pack your bags and go home.”

“This study validates this warning by showing the ability of social technologies to transform online marketplaces from impersonal transactions among strangers to personal relationships among virtual friends,” Pavlou said. “The future of electronic commerce lies in personal relationships virtually enabled by social technologies.”

The study, titled “Swift Guanxi in Online Marketplaces: The Role of Computer-Mediated-Communication Technologies,” is published online in MIS Quarterly, a top information-systems journal.

The Sarbanes-Oxley Act of 2002 in the U.S requires management the company‘s internal controls on financial reporting that rely on the company’s information systems, thereby emphasizing the role of the CIO (Chief Information Officer). Therefore, appointing a CIO with appropriate experience is an important strategic decision. We examine how companies with different strategic positioning (differentiation or cost leadership) hire different types of CIOs (with technical or business background), and how the stock market reacts to aligned/misaligned CIO appointments. Results from data drawn from Nasdaq100 and S&P500 indices support our propositions, emphasizing the CIO’s background as a factor to consider when appointing CIOs. Specifically, differentiators are more likely to hire a technical CIO, while cost leaders are more likely to hire a business CIO. Most interestingly, firms that align their CIO’s experience with their strategic positioning (differentiators appointing technical CIOs and cost leaders appointing business CIOs) have superior stock performance.

We identify a set of IT functionalities—single-location shipping, multi-location shipping, supply chain visibility, and financial settlement—that can be used to manage the flows of physical goods, information, and finances in interorganizational logistics processes. Using data from one of the world’s largest logistics suppliers and over 2,000 of its interorganizational relationships with buyers across multiple industries. The results show that the proposed interorganizational IT capability profiles and interorganizational communications have both a direct and an interaction effect on relational value.

This study conceptualizes product uncertainty and examines its effects and antecedents in online markets for used cars. Using a unique dataset comprised of secondary transaction data from used cars on eBay Motors matched with primary data from 331 buyers who bid on these used cars. The results distinguish between product and seller uncertainty, show that product uncertainty has a stronger effect on price premiums than seller uncertainty, and identify the most influential information signals that reduce product uncertainty.