Theses - Judge Business School

Permanent URI for this collection

https://www.repository.cam.ac.uk/handle/1810/223849

Browse

Now showing 1 - 20 of 46

Open Access
Machine Learning for Credit Default Risk
Shuaib, Adam
In this thesis, I present three essays examining how machine learning techniques can be used to enhance traditional approaches to credit default forecasting and pricing. In the first essay, we provide empirical evidence in favour of a widespread non-linear, time-varying relationship between sovereign credit risk and macroeconomic fundamentals across OECD countries. Random forests significantly outperform sparse and dense linear predictive models and explain up to 80% of the out-of-sample variation in CDS spreads by conditioning on macroeconomic fundamentals alone. This suggests that non-linearity may represent a key modelling feature in capturing the cross-country variation in sovereign credit risk. A set of pure out-of-sample implementations also suggest that tree-based methods may enable "shadow" sovereign CDS pricing for countries and periods in which reliable sovereign CDS data might not be available. In the second essay, we utilise a unique peer-to-peer (P2P) loan dataset to compare different machine learning approaches to predicting loan default over 2017-2021, a period that covers the Covid crisis. We find that P2P loan default factors appear stable over time, with total borrowing and account age the most important predictors across both pre-Covid and Covid sample periods. We subsequently show that the out-of-sample default predictability of short-maturity loans is considerably lower than for long-maturity loans, particularly during Covid. Higher loan repayment-to-income ratios render short-maturity loans more susceptible to Covid-driven income shocks not captured at loan origination. Furthermore, we document a structural break in the relation between default risk and payment holiday adoption rates for borrowers that are highly uncertain in their ability to repay a loan, consistent with the hypothesis that high degrees of financial uncertainty led to precautionary borrowing and subsequent precautionary payment holiday behaviour during the Covid crisis. In my final essay, I explore whether loan defaults during Covid were primarily influenced by borrower credit histories or income shocks. Monthly post-origination data captures Covid-driven income shocks unseen in borrower credit histories and results in a significant improvement in the ability to predict defaults relative to credit history data alone. This effect is stronger for shorter default windows and shorter maturity loans and helps to minimise information asymmetry between borrowers and lenders. Crucially, credit history data explains only 25% of the mean default forecast during Covid. Considering these findings, I am the first to explore the concept of an interest rate "reset clause" for P2P loans. I show that such a reset clause reduces the number of mispriced loans during both Covid and non-Covid periods, resulting in significant cost savings for lenders and borrowers alike.
Restricted
Three Essays in Corporate Stewardship
Zou, Yuxia
This dissertation consists of three essays that study how companies act as stewards of a responsible financial system. These three essays focus on three key players in the capital market respectively – institutional investors (first paper), public companies (second paper), and audit partnerships (third paper). The first paper starts with the drivers of capital in the financial system – institutional investors – to investigate why and when investment companies delist themselves from United Nations-supported Principles for Responsible Investment (PRI) but continue to operate. I find that companies are likely to delist earlier when their financial and sustainability performance deteriorates after joining PRI, especially after they are mandated to provide standardized reports on sustainable investment practices. Based on these standardized reports, I further document that companies are more likely to delist when they have weaker management control systems for sustainable investment. Collectively, the results suggest that only companies with internal and external business conditions to pursue both financial and sustainability performance can afford to maintain a public sustainability commitment in the long term. The second paper focuses on the users of capital in the financial system – public companies – to analyse the incentives and real effects of creating a separate corporate social responsibility (CSR) committee on corporate boards. We find that a firm’s decision to establish a CSR committee is shaped by the cost-benefit trade-offs associated with country and corporate characteristics. On average, CSR committees effectively reduce firms’ CSR risk in the long run, however at the cost of operational performance such as profitability and capital investment. The evidence is consistent with firms abandoning CSR-controversial projects under the heightened scrutiny of CSR committees. The third paper turns to the safeguards of capital in the financial system – audit partnerships – to examine how audit partners’ performance management and compensation systems evolved over the past decade under increased public scrutiny on audit quality. Based on internal policies and records collected from the eight largest audit firms in the Netherlands from 2007 to 2017, we find that audit partners’ performance evaluation and incentive structures have substantially increased the focus on audit quality. This evolution strengthens the alignment of goals amongst audit firms, audit partners, capital market and society.
Open Access
Continuity of Service Provision for Repeat Customers: Empirical Investigations of Continuity of Care in Primary Care Practices
Kajaria Montag, Harshita
Many service processes are sequences of independent transactions between customers and servers. In such contexts it is well known that pooling server time and offering an arriving customer the next available server, independently of whether they had seen the customer before, is most efficient. However, when customer episodes depend on one-another, then this is not necessarily the case. Ensuring customers have a dedicated server may offer efficiency advantages. This thesis is an empirical investigation of the productivity advantages of dedicated servers in the context of primary care. In this context, server dedication equates with the notion of continuity of care, which is the extent to which a patient has her consultations with the same doctor. The thesis is composed of two in-depth empirical studies. The first study provides evidence of the productivity implications of relational continuity of care (RC), while the second study addresses the question how practice managers can increase continuity of care. Both studies use a detailed clinical dataset from the Clinical Practice Research Datalink that collects patient-consultation level electronic health records and is representative of the UK population. From its overall database of over 11 million patients spanning 674 practices, our data consists of the entire medical record of 5 million patients who have had contact with primary care between 2007 and 2018 across different providers of care (secondary care etc.). In the first study, I show that continuity of care has a significant productivity benefit. Specifically, due to the trust-based relationship, accumulated knowledge over time and stronger accountability for the patient, the average time to next visit for a patient is longer when patients see their regular provider than after they see another doctor. The data shows that the productivity benefit of care continuity is larger for older patients, patients with multiple chronic conditions, and patients with mental health conditions. I discuss operational and strategic implications of these findings for primary care practices in capitation environments and for third-party payers of their services. This first study suggests that prioritizing continuity of care is an effective strategy to reduce demand for consultations. The second study, entitled “The Operational Determinants of Relational Continuity of Care" builds on the first part and identifies the levers and strategies that primary care practice managers can implement to promote continuity within the constraint of a diminishing workforce. We find that a sustained increase in workload - caused by demand growth - and increasing fragmentation of the workforce - due to a shift to part-time and agency work - induces significant heterogeneity between practices in their ability to provide care continuity. Specifically, these two factors alone explain more than 50% of the decline in care continuity over the ten-year window of the study, with workforce fragmentation having the greater impact. We discuss the implications for workforce management in primary care practices that wish to promote continuity of care.
Open Access
Three Essays on Machine Learning in Empirical Finance
Wang, Jinhua
The dissertation consists of three essays that contribute to the literature on machine learning in empirical finance. In the first paper, I create proxies for managers’ cultural fit using one of the latest machine learning technologies – the sentence embedding model - by analysing 11.5 million speeches in earnings calls. A better cultural fit is significantly and positively correlated with managerial tenure. I demonstrate that the effect of cultural fit on managerial tenure is causal using random survival forests. Firms that hire culturally disruptive managers have lower future market values and performance. The stock market reacts positively to signals that indicate low cultural dispersion within the firm. In the second paper, we document a gender-based attention effect in the sensitivity of mutual fund flows to fund performance using individual-level fund data from a fintech platform in China. Investors increase (decrease) flows to funds following positive and strong (negative and weak) prior-month performance. However, although there is no significant difference in the performance of male and female managers, the sensitivity effect significantly weakens if the fund manager is female. The effect persists after controlling for the tone of news articles on fund managers, measured using a state-of-the-art machine learning model. Simply put, investors react less to the performance of female fund managers. In the third paper, we document a significant, up to 10-fold increase in the synchronicity of intra-day, ultra-high frequency stock returns over the last decade. This surge in the intra-day synchronicity across stocks coincided with the advent of electronic, automated trading in U.S. markets. Using changes to the S&P500 index, we establish evidence of a causal relationship using a new machine learning tool - causal random forests. When firms are included in this major index, they enter the radar of high frequency arbitrageurs and market-making bots. These automated trading bots, who monitor prices in major securities closely and continuously, increase their quoting activities significantly and cause individual stocks’ returns to synchronize at the microstructure level.
Restricted
Managing the Old and New: Essays on Responses to Novel Technologies
Bin Samsuri Welch, Samsurin Welch
A central challenge for firms is to respond and adapt to technological change. Through three related chapters, this dissertation seeks to advance knowledge with a synthesis view of adaptation by unpacking the mechanisms underlying reshaping of technological frames (Chapter 2), strategizing processes (Chapter 3), as well as a typology of interactive dynamics between actors (Chapter 4). Collectively, these chapters suggest the value of how a synthesis lens and opens opportunities for future research. Paper 1 examines how an emancipatory disruptive technology can be turned to serve the interest of those it was meant to displace. Drawing on a qualitative study of the emergence of blockchain technology, we theorize a process model of disruptive capture through which a technology’s meaning can be transformed from an ideological challenge to corporate domination into a technological tool for capturing value. This study spotlights the agency of incumbent actors in not only making sense of new technologies but also actively reshaping their meaning. We emphasize the synthesis nature of this process; whereby the technology evolves into an emergent combination of established and novel aspects. We posit the value of disruptive capture for firms to take advantage of contentious technologies, rather than rejection or resistance. Paper 2 investigates the tensions managers face with novel technologies that blur traditional notions of industry boundaries. Our qualitative study of an oil and gas corporation responding to emerging digital technologies found that managers faced conflicting environmental velocities, specifically the pace, rhythm, and unpredictability of technological change. This led to clashes in temporal norms and assumptions in the processes of technology strategizing. We show how tensions induced managers to become reflexively aware of the intra-firm plurality of temporal assumptions, and through temporal maneuvering, leverage plurality to their advantage. By focusing on processes (i.e., strategizing for technologies) rather than content (i.e., novel technologies), we extend sociocognitive perspectives of technological adaptation by highlighting temporal complexities in how managers do strategizing. Paper 3 theorizes adaptation to nonincremental innovation as a process of confronting and managing contradictions. Specifically, we argue that nonincremental innovations emerge as contradictions to dominant incumbents along dimensions of resource, strategic cognition, and organizational identity. Drawing on insights from dialectics and paradox perspectives, we develop a typology of how firms respond to nonincremental innovation through conflict, mutual adjustment, assimilation, or synergy. Our theoretical model advances a synthesis view of nonincremental innovations, which departs from dichotomies of incumbent and entrant actors and technologies to emphasize the novel combinations that emerge through their interaction.
Open Access
When Audiences and Targets Collide: Towards a Relational View of Stigma in and Around Organizations
Lodge, Jan Stephen
In recent years, organizational and management scholars have taken a strong interest in the study of negative social evaluations, with a particular focus on stigma that occurs in and around organizations. To date, research in this context has focused on two overarching themes: First, it has examined how the targets of stigma respond to the pressures of social audiences by, for example, attempting to reduce their stigmatization. Second, it has investigated the flipside, namely how audiences decide to and then proceed to stigmatize and sanction targets in the first place. However, in both cases the literature to date has not examined in detail how targets’ or audiences’ interactions and crucially their relationships with one another may shape the process of stigmatization as well as responses to it. Thus, we know little about the drivers and motivations of specific actions and how, in particular, these are influenced by existing relationships between audiences and targets in the context of stigma. The present dissertation addresses this by building a more relational view of stigma in and around organizations. It does so through three studies in different contexts: the first study analyzes how organizations struck by scandal and stigma spillover navigate stigmatization and sanctions from multiple, powerful stakeholders and how their historical relationships influence their actions. The second study, located in the context of an organization that supports ex-offenders back into employment shows how relationships between staff and ex-offenders that may be established with the best of intentions can, over time, challenge and shape interactions between both groups of actors and lead to difficulties. Finally, in the third study, I theorize how organizations, through their members, can form relationships with stigmatized groups and how organizational members’ backgrounds and experiences play into this.
Open Access
What Explains the Effectiveness of Major Public Project Delivery in Nigeria?
Jimoh, Ibrahim
Ten years ago, a study commissioned by the President of the Federal Government of Nigeria identified that 11,886 large government projects of a total of 19,000 since Nigeria’s independence in 1960 not only failed but were abandoned. This abandonment rate of 63% of all government projects implies a severe problem in driving economic prosperity. With the global economic fragmentation, international help is fast disappearing; further adding to this is the COVID 19 pandemic. Project failure in Nigeria contributes to declining government legitimacy. The current investigation focuses on the management needs of government projects in order to succeed --- what resources, governance, and expertise and partnerships can support government infrastructure projects in helping the growing population to achieve economic development: roads, bridges, airports, power generation and transmission, hospitals, telecommunications networks, and so on. Governments are responsible for providing (or enabling the provision of) such infrastructure. Governments that do not offer these infrastructures limit economic and social development. Unfortunately, the ability of successive Nigerian governments to successfully deliver infrastructure development projects has been poor. This investigation asks why this is the case and seeks to offer recommendations to improve this situation. The work approached a mixed-method strategy of investigation: first, a unique detailed data set has been collected with 55 data points each on 19 abandoned and 19 completed projects (where there exists no systematic data on government projects in Nigeria). The econometric analysis of these data identifies the size of the economic levers that the success variables represent – making moderate improvements can (as suggested by the project sample) save hundreds of millions of dollars for a single project. Second, complementing the econometric analysis, 11 detailed case studies (of projects among the 38 on which quantitative data have been collected) demonstrate the causal “stories” of events and show the success drivers "live" – what it “looks like on the ground” when project success variables are missing and how the variables interact. Within about 100 variables that have been identified by previous literature as “generic” error sources in large projects, the investigation empirically identifies a small number of common themes that connect abandoned projects in Nigeria: underdeveloped financial planning combined with centralized decision-making, and corruption. Centralized decision-making (by the president or governor or a small group of connected people) results in projects emerging from the president desk rather than from careful plans. Widespread corruption not only inflates costs but also “poisons” the effectiveness of other management decisions. In order to address the problems, the study recommends several short-term measures, such as high-level political priorities, institutional changes, and portfolio planning and budgeting. Institutionally, the study proposes establishing a new Ministry of Large Projects focusing on Project Execution, project audit, and fraud protection.
Restricted
Transitioning toward Sustainability: How Corporate Sustainability Strategies Affect Stakeholders’ Actions
Piyasinchai, Nareuporn; Piyasinchai, Nareuporn [0000-0002-8514-5676]
Organizations face increasing opportunities and challenges as societies and economies transition toward sustainability. Despite growing scholarly attention devoted to understanding how interactions between organizations and diverse groups of stakeholders affect those opportunities and challenges, a number of important questions remain as to how corporate sustainability strategies affect stakeholders’ actions. For instance, how is corporate adoption of environmental, social and governance (ESG) practices perceived and evaluated by stakeholders? And how does public criticism of ESG issues targeted at firms or their peers affect how investors evaluate those firms as well as the heterogeneity in firms’ sustainability practices over time? This dissertation thus recognizes how corporate ESG strategies and communications are multi-directional, originating both inside the firms in attempts to influence external audiences’ evaluations as well as outside those firms in attempts to influence firms’ strategies. Moreover, the impacts of corporate sustainability strategies on stakeholders’ actions are multi-level in nature, ranging from industry-level (Chapter 2), organization-level (Chapter 3), and individual-level (Chapter 4). The findings from the three essays which comprise this dissertation highlight important unintended consequences as organizations transition toward sustainability and inform organizations as to how to more effectively engage in and communicate ESG practices, while contributing new theoretical insights into sustainability research.
Open Access
Processing Novel and Competing Demands: Essays on Managerial Approaches to Change
Fraser, Jack
This thesis uses a socio-cognitive lens to explore managerial responses to novel and competing demands. The dissertation is structured around three chapters, each exploring the mechanisms through which managers understand, make sense of, and process competing demands1. Each chapter focuses on a context in which competing demands emerge from a change in the normal practices and expectations, specifically: industry disruption (Paper 1), planned organizational change (Paper 2), or the implementation of? institutionally complex working practices (Paper 3). In each case, our concern is with the heterogeneity of perspectives that exist amongst managers, the way in which these divergent perspectives interact, and the process through which they influence organizational responses. In doing so, the paper draws on the notions of framing, sensemaking, paradox, temporal structures, and temporal work. While these chapters exist as stand-alone studies, they have mutually influenced each other. The first paper in this collection – ‘Exploring Multiplexed Framing in Incumbent Responses to Digital Disruption’ – addresses the nature and role of framing in managerial responses to disruptive innovation2. Much of the research that applies a framing lens to incumbent responses to disruptive innovation fails to account for intra-firm heterogeneity. To explore the processes involved, we conducted a case exploration of the response of a multinational insurance group to a digitally-led disruption: the rise of online aggregator platforms between 2002 and 2007. Our analysis mapped managerial frames across three dimensions: Challenge Type, Response Urgency and Firm Heritage. This paper introduces the notion of multiplexed framing – accommodating multiple, non-binary frames – and propose that these are holographically distributed through the organization – such that conflicting frames can be held by members of the same organizational department or group. The combination of these two characteristics generates an ambiguity within organizational subunits which allows managers to achieve an equifinal resolution of conflict: selecting the same responses for different reasons. This enables the organization to rapidly trial and shift between different strategic responses. The second paper – ‘The Future is Now: Temporal Work, Sensemaking and Agency during Planned Change’ – explores the process through which competing temporal orientations are reconciled during planned organisational change3. Planned change can trigger substantial uncertainty as managers deal with competing understandings of how to act in the present while changing in expectation of the future. Left unreconciled, these competing accounts can lead to conflict and breakdowns in the change process as managers prioritise present demands. While ‘temporal work’ to develop coherent links between the past, present and future may help to overcome these tensions, such an approach can be hard to achieve in contexts where the disparity between the present and future is sufficiently large. This paper draws on a participant-observation study of Fincorp – a multinational organization undergoing substantial strategic change – to explore how managers address this challenge. We find that managers overcome tensions between the present and future by engaging in what we call ‘Temporal Reconstrual’ – a kind of “mental time travel” – in which managers make decisions about the present from the perspective of the future, by adjusting their orientation in time. Drawing on literature from temporal sensemaking, neuroscience and cognitive theory, we show how such a process utilizes ‘hindsight bias’ to discount the value of immediate demands. This in turn helps managers progress with change initiatives in spite of irreconcilable tensions between the present and future. This focus on the role of temporality during periods of change and novelty is continued in the third paper of this thesis: ‘Navigating paradoxical tensions through the interplay of temporal structures’. This paper focuses on the interplay of distinct temporal structures amongst managers in a new organization at the boundary of two institutional fields. In these contexts, managers are often required to meet contradictory but interrelated demands. While transcendence – accepting both sets of demands as necessary and complementary – has been shown to be an important response to such paradoxes, achieving it places significant cognitive strain on managers. This is particularly problematic in cases where fulfilling opposing institutional demands is required for the survival of the organization. In these cases, there is little empirical research into the practices that managers resort to when initial efforts to achieve transcendence break down. This paper draws on a longitudinal study of the early phases of operation of a joint-venture spanning two institutional fields. We argue that ‘zooming in’ to focus on the interplay of their underlying temporal structures can unveil novel and surprising sensemaking processes amongst managers navigating paradoxes. Through our analysis, we show that managers deconstructed the opposing poles of the paradox into their respective temporal depth – defined as the span into the past and future that they typically consider – and temporal horizons – measured by the frequency of milestones within this span. Through a process of temporal work, managers on both sides of the institutional divide were able to negotiate a new, shared temporal depth that accommodated the temporal horizons of both sides. We show that this process provided a structure within which to consider the demands on both sides as necessary and complimentary, which was not previously possible.
Open Access
Essays in Asset Management: Mutual Funds and Exchange-traded Funds
Zheng, Xinrui
This dissertation consists of three essays related to fund management, and in particular, mutual funds (MFs) and exchange-traded funds (ETFs). The first essay studies the decision by an asset manager to launch an exchange-traded fund (ETF). Fund families focus on both revenue generation and cost reduction when making launching decisions, with new ETF launches being driven more by investor demand than past performance. The ETF industry exhibits significant economies of scale and scope, allowing larger families to benefit from specialization while giving smaller families pressure to expand their product line. Competitors tend to follow the asset allocation decisions of the three largest ETF providers, unless when it comes to less liquid or highly concentrated objective markets. Finally, a time-to-event analysis shows that an ETF survives for longer if launched by fund families with larger size and higher fees, and whose initiation is not driven by excessive flows into the family. The second essay studies the effects of managerial turnover and competition on U.S. sub-advised mutual funds (MFs), using changes of subadvisor by 426 funds from January 1995 to December 2016. Sub-advised MFs make turnover decisions based on return-chasing behavior, but these changes neither improve subsequent fund returns and risk measures, nor increase future flows into the fund. Using sub-advisor turnover to change the degree of competition among sub-advisors does not affect the performance of incumbent sub-advisors. Overall, there is no evidence that sub-advisor selection decisions by fund families benefit sub-advised MF's performance. Outperforming sub-advisors with larger style drift are less likely to be hired, and the more a sub-advisor deviates from its investment mandate, the more likely it is to be fired. The third essay uses 2,290 European equity and fixed income ETFs and studies how the replication method affects the tracking efficiencies of ETFs, especially during market crises. Throughout the 20-year sample period 2001 to 2020, there is no persistent evidence suggesting superior tracking performance of synthetic ETFs. I identify 119 benchmarks followed by both physical and synthetic ETFs simultaneously and conduct a difference-in-difference analysis around Lehman Brothers bankruptcy, sovereign debt crisis and COVID-19 outbreak. Synthetic ETFs face steeper declines in tracking efficiencies following a sudden increase in counterparty risk, while they are shielded from liquidity shocks. There is a remarkable drop in tracking performance sensitivity to market distress post the global financial crisis.
Open Access
Sustainable supply chains: Bridging the gap between environmental economics and operations management
Wijnsma, Sytske
In 2030, we will reach the deadline of most Sustainable Development Goals (SDGs) set by the United Nations, which represent a universal call to end poverty and protect the planet. The SDGs are distinct from previous environmental and social targets because they recognise that development must balance economic, social and environmental sustainability since interventions in one area may affect outcomes in the others. The goals are therefore an integrated and balanced package and, following that same logic, will require an interdisciplinary and multi-stakeholder approach. This thesis integrates the fields of environmental economics and sustainable operations to uncover novel research questions and to provide more holistic solutions that will advance the attainment of the SDGs. This work focuses in particular on social and environmental issues in supply chain contexts that key organisations have identified as some of the most pressing challenges. The first chapter looks at the triple-A (agile, adaptive, aligned) supply chain framework through the lens of sustainability. The concept of triple-A supply chains is that the best supply chains are not only fast and cost-effective but also agile, adaptable, and aligned. This notion has been studied extensively and has influenced the management approach in leading companies around the world. Yet since the triple-A concept was first developed, supply chains have become increasingly global, connected, and interdependent. The increased complexity of global supply chains has reduced much-needed visibility, further complicating their management, while the growing connectivity and interdependence among different stakeholders have led to many unforeseen environmental and social issues. In light of these new challenges and demands, we revisit the original triple-A definitions and expand these concepts for a more socially and environmentally conscientious world. This new framework can help firms see sustainability as a new opportunity rather than an additional constraint. We also discuss potential enablers of and barriers to sustainable triple-A supply chains and give an overview of sustainability topics yet to be explored in the supply chain literature. The second chapter takes a unique look at the effect of waste regulations on the economic and environmental performance of the reverse supply chain. The project was motivated by my collaboration with Europol, the European Law Enforcement Agency. Every year, the world produces over $62.5 billion worth of electronic and electrical waste (e-waste), but only 10% of that is recycled in compliance with regulations. To minimise the negative impact of unwanted waste disposal methods such as dumping and export, policymakers have implemented or increased the enforcement of laws designed to combat them. Even so, violations are rampant as proprietary information and a high degree of heterogeneity between firms render monitoring imperfect. Decentralised waste disposal chains, a common form of inter-business organisation, compound this problem as firms also have limited information available on the other chain partner, therefore creating complex interactions between firm behaviour and policy interventions. Against this background, we analyse the effects of policy options on firm profits and compliance. Our analysis reveals that primarily focusing on penalizing dumping by treatment operators can worsen waste chain outcomes. Solely focusing on penalizing low-quality waste exports, a common intervention in practice, can also backfire. Instead, penalizing manufacturers for downstream dumping should be given consideration. In addition, the asymmetry in export burden between waste quality levels should be reduced, which improves both waste outcomes and treatment operator profits. My third and final chapter focuses on alleviating poverty of rural smallholders. The project was built on findings from a research visit to the UN Environment Programme (UNEP) in Nairobi, the global environmental authority within the United Nations system, and from a continuous collaboration with the UNEP-WCMC, the conservation unit of the UN. Over 70% of the poor live in rural areas in developing countries and smallholder farmers are among the poorest. Since hundreds of multinational buyers have made commitments to source responsibly and poverty eradication is a fundamental objective of the SDGs, the importance of addressing rural poverty in a sustainable manner is self-evident. Traditionally, rural smallholders were primarily viewed as farmers, but development projects have shown that smallholders typically pursue a diverse portfolio of activities to complement their farming income. We therefore explore the link between rural poverty and livelihood composition, a factor rarely captured in current poverty analyses. Using a sample of over 4,000 rural smallholders across 16 developing countries, we explore the poverty impact of compositional aspects of household income, explicitly differentiating between income derived from environmental, farm, and non-farm sources. Our findings have important implications for how we understand rural livelihoods and how policymakers and buyers of commodities can improve the ability of smallholders to develop value-creating portfolios. With under ten years left to achieve the Sustainable Development Goals, we have entered a decade where ambitious action is crucial. My research advances the attainment of these goals by applying frameworks in operations management, such as sustainable supply chain management, to challenges identified in Environmental Economics, such as illicit waste management and poverty. I hope that this thesis and the work built on it will help accelerate progress on the SDGs by showing the benefits of an integrated approach.
Open Access
Enabling Conditions for Organizational Learning: A Study in International Business Ventures
(Centre for International Business and Management, ) Drummond, Aldemir Jr
The significance of international business in the world economy has greatly increased since the beginning of the 1980s, mainly as a consequence of the expansion in the flow of foreign direct investment. Declining costs of transportation and advances in information technology have allowed transnational corporations to spread the production of goods and services around the world. Increasing competition has represented a continuous pressure on organizations for faster or better adaptation to a changing environment. Despite these pressures for change, organizations also need some stability in order to make sense of both the direction they want to take, and the actions which can help them to keep the course. Knowledge about an organization's internal affairs and its interaction with the external environment has become a main source of competitive advantage. The process by which organizations create or acquire this knowledge has been called organizational learning. This dissertation seeks to identify and discuss some key factors which facilitate the occurrence of organizational learning in International Business Ventures (IBVs), here understood as the involvement of foreign investing companies in host countries, with some degree of management that is shared between nationals of both local and foreign countries. The dissertation describes four in-depth case studies in two IBVs, one located in the UK and the other in Brazil. The first company is a subsidiary of Toshiba, which produces television and air conditioner sets for the European market. The second company is a joint venture between Toshiba and Semp, a local company, which produces television sets, VCRs and audio equipment for the Brazilian market. Due to the lack of empirical research in the field of this study, data collection and analysis followed the broad lines of the grounded theory approach. Two processes of organizational learning occurring during the last few years in each company were identified and reconstructed through semi-structured interviews with their key participants. Data about the companies and the processes was supplemented with the use of secondary sources. Througout the whole study particular attention was directed to the context where the processes developed. All interviews were tape recorded and transcribed verbatim. The data were then qualitatively coded in order to help the identification of the main themes and categories related to the objective of the study. Literature was reviewed during all stages of the research in order both to stimulate theoretical sensitivity and to enhance the generalizability into theory of the main findings of the study. Some of the main areas of contribution from the research include: the relationship between time and behavioural/cognitive changes in processes of organizational learning; the relationship between time and acquisition of tacit/explicit knowledge; the analysis of outcomes as moments in a process, and their use as leverage for continuous learning; the importance of control for guiding the process and evaluating its outcomes; communication as a major difficulty in the work of cross-cultural teams, and strategies to overcome such difficulties; and the relationship between local and foreign knowledge for the management of IBVs. In addition, the analysis of processes of organizational learning and the attention given to their context represent a methodological contribution of the study.
Open Access
Connecting for a Social Good: A Multi-level Analysis of a Nascent Online Community
Perez-Hallerbach, Ignacio
Online communities (OCs) such as Wikipedia have the potential to transform our global society and economy. Building and sustaining OCs, however, appears to be rather complex. Indeed, most OCs fail early on. The extant OC literature cannot fully explain this phenomenon. This thesis is thus motivated by the increasing importance of OCs and the unsolved complexities regarding building and sustaining them. In particular, it aims to answer the research question of how nascent OCs evolve and what the influences are on this evolution. To this end, it examines a longitudinal 34-months long case study of AshokaHub, a nascent global OC of social entrepreneurs, combining interview data with qualitative and quantitative data from the AshokaHub platform. Despite favourable conditions at AshokaHub’s launch and a re-launch with new functionality and curation strategies, user contributions remained limited. Drawing on the OC and social entrepreneurship literatures as well as the theories of affordances, technological frames of reference and groupware adoption, this thesis develops a multi-level model to address the research question. This model theorizes the evolution of nascent OCs and the influence of context and materiality on this evolution. It highlights that OC evolution happens as users across different social worlds within the OC continuously adopt and change their ways of using it. It also highlights that, on an individual user level, this OC evolution happens in a recursive process of framing, affordance perception and affordance actualisation that influences and is influenced by the material characteristics of the OC’s technological platform and is shaped by the OC’s context. This thesis thus contributes to the OC literature by providing insight into how nascent OCs evolve and what influences this evolution. In addition, it contributes to affordance theory by introducing the concept of a collaborative OC affordances. This concept aims to explain how collaborative affordances emerge and evolve on OCs given the generative nature of their underlying technological platforms. These findings have managerial implications as well. Good practices are identified that can support the successful start of an OC. This is complemented with a discussion on how to be situationally aware of the unpredictable evolution of an OC after its start.
Open Access
Materiality, identity and social positioning: The case of the Elbphilharmonie
Heuer, Tobias
The papers in this dissertation are studies of totalities such as the NDR EO, the citizenry of Hamburg, the French fashion house Chanel, and the Elbphilharmonie concert hall itself. Each of these totalities is a component of larger totalities, such as the NDR EO being part of the Norddeutscher Rundfunk (NDR) organization or the Elbphilharmonie concert hall being part of the object that is the larger Elbphilharmonie complex. All such totalities comprise individuals and (technological) objects. The theory enabled me to address the relationships between the totalities via the social positions they occupy, and the attendant social identities, system functions, rights and responsibilities. However, the PhD Viva and the examiner’s report made me aware that using social positioning theory (SPT)—an established theory—was unsuitable to be used in the first paper in this dissertation, because my methodology was guided by a grounded theory building approach and I have accordingly adapted and largely rewritten this paper over the last six months. The paper responds to Watkiss and Glynn’s (2016) call for empirical work on how differing forms of forms of materiality might affect organizational identity and takes into account that organizational identity change needs to be studied in more contexts with a focus on how it changes (Gioia et al., 2013). I use the case of the NDR orchestra’s relocation to the Elbphilharmonie to explore how moving into a new building may trigger organizational identity change. Various aspects of the two organizational identity pillars of “who we are” and “what we do” are explored, focusing specifically on how a relocation leads to the need to redetermine who the organization is and what is does. I find that the relocation triggered a new set of identity dynamics between the pillars that cause mismatches and introduce “where we are” as a third pillar for organizational identity. The organization uses two forms of identity work to address the symbolic and practice mismatches between the pillars, which I term as symbolic-material alignment and practice-material alignment. I also show that the relocation led to positive and negative effects, most notably motivation and anxiety amongst its members, which it attempts to balance to achieve an overall positive outcome: an improved organizational performance. Nevertheless, I show that a positive overall outcome is not a given result of a relocation, as anxiety can prevail over the motivation. As a result, I am able to show the importance of carefully managing relocations to secure improved organizational performance and to unlock the potential a relocation can bring. Note that my study interprets the “where we are” pillar in a narrow sense of being restricted to the building an organization occupies and a place change to a more central location within a city. But there are of course others senses of “where we are”. For example, while the relocation to a new building within a city changes the symbolic and material conditions of the organization in one way, it does not change its location in a wider regional sense. Thus, I suggest future research is necessary where other forms of relocation are examined, for example a relocation to a new city, region or country. I also suggest that future research is necessary to study cases in which organizations have outgrown their premises and have changed the organizational identity pillars of “who we are” and “what we do” in advance of a relocation, and the identity dynamics have caused mismatches with their current “where we are” to an extent that a relocation is without an alternative, for example in a startup context. The interviews conducted for the first paper sparked various questions about the social positioning processes in which the Elbphilharmonie building was involved, and how these might reflect on the identity of the citizens of Hamburg and the city as a whole. The second paper, recently published in the journal European Planning Studies, addresses these questions. While some of the data from the qualitative interviews was helpful for developing the research question, I collected a second data set from individuals involved in the social positioning processes of the building. These included people who had worked on the marketing campaign for positioning the building, for example those from Hamburg Marketing and Jung von Matt, the cultural senator and some journalists. The interviews revealed some remarkable perspectives on how the positioning of the building unfolded over time and might have affected the identity of the city and its citizens. I further learned how, over and above its geographical location at the heart of the city, the buildings (e.g., Johns shipyard, Kaiserspeicher A, Kaispeicher A, and Elbphilharmonie) and their associated system functions, reflected the core identity of the city over time (e.g., shipyard and shipbuilding, warehouse and trade, concert hall and culture). This data was blended with secondary material gleaned from the popular press. The key finding of the paper is what I call “the Hamburg effect” as distinct from the well-established Bilbao effect. Whereas the Bilbao effect is an example of how an instance of star architecture can increase the attractiveness of a city for national and international tourism (as reflected in the statistics on the origin of visitors to the Guggenheim museum), the Hamburg effect is an example of how star architecture can increase the attractiveness of particular activities for regional and local citizens (more than 80% of the audiences attending the concerts at the Elbphilharmonie are from the Hamburg area): Inquiries from external organizers for concert dates in both halls of the Elbphilharmonie rose to a record high. In contrast to the large hall, which was already busy in the previous season, the number of events in the small hall rose from 254 in 2017/18 to over 300. The Laeiszhalle also experienced a noticeable increase in concerts and visitors. This development is particularly gratifying because it shows that the music city of Hamburg is also growing beyond the Elbphilharmonie. Overall, the number of concert goers in Hamburg's concert halls has thus continued to increase. With around 1.25 million guests, the city now has more than three times as many concertgoers as in the 2015/16 season, the last season before the opening of the Elbphilharmonie. This extremely gratifying development is due above all to the enthusiasm of thousands of new music lovers from Hamburg and the metropolitan region, for whom attending concerts has become an integral part of their everyday lives. We are particularly happy that the Elbphilharmonie has reached the center of society in our city in this way. (Elbphilharmonie (2020): Elbphilharmonie Annual Report, 2018/19: 4) When looking for the topic for a third paper, I came across a prominent example of the Elbphilharmonie and the main concert hall serving system functions other than those they had been designed for: as a venue for the Paris-Hamburg Chanel M’étiers d’Art show 2017 that exploited both the prestige and beauty of the building and the imagery associated with the city and its maritime history. The collection was inspired by male, professional and maritime themes, repositioning clothes formerly associated with harbor or trading activity as women’s fashion items. As the presentation of fashion items is an instance of product positioning, this required me to become familiar with the marketing and strategy literature on product positioning (the two are often grouped under the heading of strategic positioning, and with the marketing literature often overlapping with brand positioning and the strategy literature often overlapping with firm positioning). I realized that these two sets of literature had become quite siloed and lacked a coherent overarching theoretical framework that was able to accommodate product, brand and firm positioning in a unified way. I accordingly decided to attempt to use SPT towards this end, and to use the fashion show as an illustrative case of the interrelationships involved. As the subjects of firm, product and brand positioning are discussed in a variety of diverse literatures, it took some time to find common themes and align them with my theoretical framework. What helped was to increase the scope of this paper and the timeframe of how fashion shows changed over time. The challenge here was that I was unable to gain access to Chanel itself and wasn’t granted a single interview with anyone at the firm who had been involved with the event. However, I did speak to professionals in the beauty, fashion and luxury domain, as well as to fashion models and journalists with insider knowledge. The dataset was strengthened with information gleaned from books, as well as numerous secondary interviews granted to various publications. The resultant dataset enabled me to gain a wider perspective and to develop a theoretical framework that made it possible to harmonize some of the strategy and marketing literature, and to show how the fashion shows of the major fashion houses, at least in many cases, have morphed from being product positioning platforms aimed mostly at local audiences to becoming communication tools in the form of in-person content creation platforms to be amplified online for a global audience. The show in Hamburg exemplified how a firm might be able to harness the positioning of a prestigious building, and how the interrelationships between firm, product, and brand positioning can be exploited.
Open Access
Defining Organizational Purpose and Exploring the Concept’s Implications for Innovation: How Perspective Affects Creative Idea Generation in the Innovation Process
Ebert, Charles
In the last decade, organizational purpose has re-emerged as a prevalent topic in the practitioner world. However, a detailed academic understanding of the modern version of the concept and its implications has remained elusive within the Marketing literature. This thesis focuses on developing a robust construct of organizational purpose, as well as beginning an exploration of the concept’s implications for business practice and performance. Two papers comprise the thesis. The first paper analyses in-depth interviews with upper management employees in peer-recommended firms, with the goal of developing a robust understanding of the concept of organizational purpose as it is used in practice today. After a definition of organizational purpose is established, a conceptual framework is built that delineates possible drivers and consequences of the concept’s adoption in today’s business landscape. The second paper presents a series of experiments that explore one possible implication of a firm adopting an organizational purpose, a change of perspective within the innovation process. Longitudinal analysis of creativity tasks over a three-week period, combined with an online experiment and an in-field pilot study demonstrate that perspective can impact both the number and the creativity of generated ideas in the innovation process. Altogether, this thesis attempts to accomplish two objectives. First, it lays a foundation for understanding and building research around an emerging practitioner concept. Second, it demonstrates how the concept of organizational purpose can be used to develop research projects that bring valuable insight to business practice.
Embargo
Microfoundations of Strategy: Enriching the Psychological Underpinnings of Upper Echelons
Tang, Shi
This dissertation consists of three related essays that contribute to the microfoundations of strategy and the upper echelons perspective in particular. The first essay (Chapter 2) unpacks the psychological mechanism through which top management team (TMT) gender diversity lends strategic advantages to firms. The findings reveal a unique interpersonal mechanism (TMT psychological safety) that mediates the positive effect of TMT gender diversity on firm ambidexterity. This mechanism highlights the gender-specific interpersonal benefit of TMT gender diversity, which is markedly distinct from the cognitive-variety mechanism that has been associated generically with TMT demographic diversity including gender. The second and third essays (Chapters 3 and 4) then move beyond the demographics of upper echelons and explore a fundamental yet under-investigated psychological aspect—their subjective constructions of time (i.e., subjective time). Because conceptualizations of subjective time have been ambiguous and fragmented in strategy and other organizational fields, Chapter 3 advances a conceptual clarification and integration of extant temporal concepts in organizational research. Specifically, we offer a framework that integrates the temporal concepts into four archetypes of subjective time (individual temporal disposition, individual temporal state, collective temporal state, and collective temporal disposition). Then, we illustrate the distinct conceptual nature and theoretical implications of each temporal archetype. Building on a better conceptual base, Chapter 4 introduces a new concept of individual temporal disposition—a CEO’s temporal ambivalence. This concept captures a CEO’s deeply ingrained tendency to simultaneously attend to the present and future in strategy making, which sheds light on a dispositional account of firms’ heterogeneous strategic choices in the face of intertemporal tensions. In this chapter, I show that CEO temporal ambivalence facilitates firm ambidextrous innovation through shaping the CEO’s attitude toward contradictions and perception of complex causality. Collectively, this dissertation advances upper echelons research on two fronts: (a) by unpacking the psychological mechanisms underlying the executive characteristic–firm outcome relationship, this work promotes the theoretical depth of upper echelons research; and (b) by venturing upper echelons inquiries into the largely uncharted territory of subjective time, this dissertation also adds to the theoretical breadth of upper echelons research.
Embargo
Data Mining and Causal Analyses: A Healthcare Operations Approach to Understanding the Patient Journey
Bobroske, Katherine; Bobroske, Katherine [0000-0002-7994-8181]
This thesis intersects traditional operations management and data analytics with clinical applications to provide insight into the patient journey – the process of how patient seek and receive care from the healthcare system. In the first section of the thesis, we empirically analyze the beginning stage of the patient journey of opioid use. In the United States alone, the opioid epidemic contributes to tens of thousands of deaths each year, and the government has funded billions of dollars of interventions including prescription drug monitoring programs and tamper-resistant opioid formulations. As most research is focused on chronic opioid users, little is known about how operational interventions shortly after opioid initiation can impact a patient’s likelihood of long-term opioid use. We combine medical and pharmaceutical claims to investigate the care delivery process for patients who initiate opioid prescriptions in the primary care setting. Of the patients who return to the primary care setting for a follow-up appointment, we estimate the impact of provider discordance (i.e. seeing a clinician other than the original opioid prescriber for the follow-up appointment) on long-term opioid use. A series of controlled logistic regressions, instrumental variable analyses, and propensity score matching (with a bias minimization method) establish a significant causal effect in the presence of unobserved confounders. Additionally, we analyze a potential mechanism underlying the main effect and investigate the factors that could help inform a potential process intervention. The analyses provide robust evidence that provider discordance during opioid initiation could be a promising and hitherto untapped opportunity to reduce the influx of patients afflicted by the opioid epidemic. In the second section of this thesis, we take a broader view of the patient journey and develop a methodology to extract a clinically meaningful representation of patient journey diagnosis and treatment patterns from claims data. While medical and pharmaceutical claims are a rich source of data in healthcare research, they are also notoriously difficult to analyze. We first process claims into strings of characters that represent the series of events (e.g., distinct interactions with the healthcare system) in the patient journey. Then we adapt the dynamic program underlying the Levenshtein edit distance sequence alignment algorithm to evaluate the level of similarity between each pair of episodes. The similarity scores serve as inputs to an unsupervised clustering algorithm that extracts the main patterns of the patient journey. When the methodology is applied to the context of mechanical back and neck pain, it yields an overview of the main treatment patterns that had not been previously captured in the medical literature. The methodology also enables investigation into self-triage: how the patient’s first decision of where to seek care is associated with longer-term variation in treatment. We identify clear differences in patient-level socio-economic and clinical characteristics between both the choice of initial site of care and treatment patterns, highlighting the potential public health impact of this methodology. Overall, we show that applying data mining and econometrics to claims data yields insights that contribute to both the medical and operations fields.
Embargo
The Corporate-Level Allocation of Resources in Multi-Business Firms
Lindlbauer, Niklas
In this Ph.D. thesis, I study the allocation of resources from three different perspectives. The first chapter develops an understanding of how a firm’s level of adjustment in its resource allocation affects its financial performance. This inquiry aims to address the research puzzle about whether the strategic approach of dynamism or persistence is superior when it comes to resource allocation adjustments. Based on a large sample of firms listed on the S&P 1500 Index, my study finds evidence of an inverted U-shaped relationship between firm performance and the degree of adjustment in resource allocation to strategic business units. The inverted U-shaped relationship is modified in highly dynamic industries where firms that incur a high degree of adjustment achieve greater returns than firms in less dynamic industries. Further, companies operating in highly competitive environments are punished more for failing to adjust their resource allocation properly. The paper has received an invitation to revise and resubmit at the Strategic Management Journal. In the second chapter, drawing on the concept of private information, I develop and test theory of why some multi-business firms show stronger tendencies to inertia in their resource allocation than others. Results indicate that firms with high levels of unrelated diversification act less dynamically in adjusting their capital resource allocation. In addition, the paper’s findings suggest that several critical factors related to the main stages of the process of using private information moderate the relationship between a firm’s level of diversification and its degree of adjustment in resource allocation, allowing highly diversified firms to reduce their agility disadvantages. The paper has been invited for presentation at the Annual Meeting of the Academy of Management (AoM) 2020 and at the Annual Conference of the Strategic Management Society (SMS) 2020. Finally, the third chapter aims to develop an understanding of the ‘inner workings’ of the corporate headquarters in the context of resource allocation. This conceptual paper involves a case study based on interviews with the strategy team in charge of managing the corporate-level resource allocation process at one of Europe’s largest multi-business firms. Through this project, I develop a processual understanding of corporate-level resource allocation in multi-business firms. The paper contributes to the literature by creating a more nuanced understanding of the centralized resource allocation function of the corporate headquarters (its control rights) and ultimately of the notion of a firm’s so-called private information advantage. The paper was presented at the SMS Annual Conference 2017 in Houston and at the AoM Annual Meeting 2018 in Chicago.
Open Access
Three Essays on Dynamic Corporate Finance in Continuous Time
Chen, Shiqi
This dissertation is composed of three related essays that contribute to the literature on dynamic corporate finance theory. In the first essay, we study dynamic group decisions by examining how heterogeneity in risk preferences of decision-makers influences the joint dynamic of financial policies. Each member receives a non-tradable claim that reflects her risk preference. Claims are convex, S-shaped and concave for investors with the lowest, intermediate and highest level of risk aversion, respectively. The group's optimal investment policy is a time-varying weighted average of investors' optimal policies. Debt is safe and procyclical as the firm dynamically rebalances in response to shocks. We show that only non-linear contracts in conjunction with dynamic investment and financing policies can substitute for rigid group membership. The second essay explores how information acquisition affects a firm's learning, investment, payout and utility under incomplete information and imperfect learning. Extra information improves learning, induces more aggressive investment and encourages higher payout. However, the costs incurred can overturn the benefits generated and lead to further inefficiency, dampening the motivation to search for information. The demand for information is shown to be time-varying. It increases when the investment environment is volatile, and when the investors' marginal utility of consumption is high. It decreases when the firm's estimated rate of return from investment is high as learning becomes a second-order concern. The third essay studies the interaction of individual firms' leverage dynamics and product market competition. Equity holders are unable to commit to a future debt level and determine the firms' financing, production, entry and exit decisions. Non-commitment makes debt financing more expensive as debt holders foresee a ratchet up in future debt, raising the entry barriers and hindering new entries into the market. This results in lower product market competition, lower total output and higher output prices. The absence of debt policy commitment reshapes the stationary firm distribution, increases the market turnover rate and escalates the industry leverage.
Open Access
Organizing Digital Innovation in Healthcare
(2020-09-03) Polykarpou, Stavros; Polykarpou, Stavros [0000-0002-5344-5666]
This PhD thesis examines the organizing of digital innovation in the healthcare sector, by drawing on process and practice-based approaches and by utilizing comparative field and longitudinal ethnographic methods, at three different hospital sites. Health care systems across the globe are under pressure, and digital innovation is seen as having tremendous potential and hope for transforming healthcare delivery. Digital innovation introduces a new, open-ended value landscape for generating or capturing value, which is integral to organizing. The thesis examines the overarching question of how to address the ongoing challenges of organizing for digital innovation at different stages of the process, including the underexplored allocation stage, as well as the usage and appropriation stages. To do so, the thesis employs a novel theoretical framework that focuses on three specific areas of the phenomenon. First, to address the challenge of justifying and establishing the value of digital innovations, the first paper devises a performative framing perspective to examine how practitioners’ temporally oriented framing practices matter in justifying and enacting different possibilities for reputational value. Value is conceptualized as fluid and mutable over time in the digital age. The second paper examines how and why places are consequential for the scaling of the digital innovation of 3D printing, at the usage stage. By taking seriously the role of materiality in scaling, I propose a broader understanding of scaling as processes of place bending, framing and jumping, which are intertwined with considerations of resourcing, materiality and location meaning. Finally, the third paper focuses on how occupations defend, contest and create boundaries at the implementation stage. The paper shows how the materiality of artifacts and spaces is constitutive of the way occupations mobilize, maintain and expand their jurisdictional boundaries. The dissertation concludes by discussing two overarching contributions that provide opportunities for future research.