In this paper, we study methods that could improve the performance of a coordinating supply chain contract. Past studies indicate that such contracts as revenue sharing do not necessarily coordinate a supply chain in practice. We propose an approach which could possibly correct this inefficiency by incentivizing the retailer to improve supply chain outcomes. Experimental studies on human subjects are used as the basis to verify our framework in modeling decisions outcomes. Our results show that a revenue sharing contract can still coordinate a supply chain if the retailer is offered additional incentives. We also discuss limitations of our analysis and provide suggestions for further research on how coordinating contracts could be designed to deliver consistent optimal performance.

My dissertation is about joint optimization of firms operations and marketing decisions with explicit modelling of customer behavior. It includes three essays: The first essay, “Advance Selling—The Effect of Capacity and Consumer Valuation Interdependence,” considers a seller who can offer a product twice, in advance and in spot markets. Customers strategically choose when to purchase the product. Customers valuations may be inter-dependent and the seller decides on whether, when, and how to sell in advance. I show that customer valuation interdependence dramatically influences firms strategy. For example, when customers preferences are diverse, firms typically quote discounted price, but may limit the capacity available in advance. In contrast, when customers preferences are highly correlated, firms with limited capacity can charge premium price in advance. The second essay, “Rationing Capacity in Advance to Signal Quality,” extends the analysis of advance selling to incorporate asymmetric information regarding product quality: firms usually have better information about products quality in advance than customers do. I characterize firms strategy in equilibrium and find that the asymmetry in information always hurts high-quality firms. These firms need to sacrifice some of their potential profit, by lowering price and/or limiting capacity in advance, to signal to customers their high quality. The third essay, “Demand Shaping and Product Overselling to Better Match Supply and Demand for Assemble-to-Order Firms,” focuses on jointly producing and marketing multiple products for assemble-to-order firms, where assembly of final products occurs only after demand arrives and takes negligible time. The key question is how to match final product demand with limited on-hand component inventory. By incorporating customers price-based demand substitution into firms decisions, I propose two control strategies, demand shaping and product overselling. I characterize the optimal pricing and order-acceptance policies, and evaluate the benefits of these two strategies both individually and jointly.

The small amount of research completed on executive pay disparity provides contradictory results as to the relationship with firm performance. To reconcile disparate findings, I utilize behavioral and economic rationale to illuminate the conflicting incentive and collaborative components of large pay disparity between the top management team and the chief executive officer, proposing a nonlinear relationship. Additionally, I address how similarity of the top management team to the chief executive officer amplifies both positive and negative reactions to exorbitant pay disparity, creating a more acute relationship.

In the first essay, an analytical study is conducted on the optimal timing of introduction of a sellers products targeted at segments that differ in their willingness to pay for quality. There are many examples where sellers introduce a high-quality product followed by a lower-quality version of the product, thus stretching their product line down-market after introduction. Past studies have suggested that such an introduction sequence may mitigate the cannibalization effects of the low-quality product on profits from the high-quality product. However, there are several other instances where firms introduce a lower quality model and follow it up with a higher quality model, thus stretching their product line up-market after the introduction. In this paper, we identify the conditions other than technological improvements occurring over time that may justify such a sequential strategy. We show that in the presence of replacement buyers, firms find it optimal to follow a low quality product with a high quality one. Furthermore, the more reluctant replacement buyers are about replacing their existing product, the more likely a firm will adopt a low-high strategy. The second essay investigates the interesting phenomenon in the automotive industry that cash rebates are more common amongst American automakers than their Japanese counterparts. Japanese manufacturers seem to counter by offering added features to their product instead of a similar discount offer. In this paper, a model is set up to analyze this behavior and help explain the divergence in strategies.

This dissertation investigates how institutional environments and firm resources influence firm scope. Building on strategy and international business literatures, I propose that institutional environments influence firm scope through the impacts on both the development of internal resources and the availability of external resources. In Chapter 2, I disaggregate the concept of institutional distance into different dimensions from an institutional perspective and empirically test the validity of the multi-dimensional approach in the sample of U.S. and Chinese firms by exploring the effects of distance on the foreign expansion strategies. The results also show that Chinese firms do have different strategic choices from U.S. firms when they invest abroad. In Chapter 3, I focus on government and international diversification in emerging economies. Compared with partially privatized enterprises (PPEs) and fully privatized enterprises (FPEs), state-owned enterprises (SOEs) are less likely to go abroad as a result of their risk-averse nature. In addition, different types of government corporations rely on different types of resources when they invest abroad: while SOEs reply on external resources such as debts, PPEs rely on internal resources such as intangible assets. An empirical investigation of the FDI activities of Chinese listed firms in high-tech industries between 1991 and 2007 supports the arguments. Finally, in Chapter 4, I focus on firm capability and related product diversification in emerging economies. I propose that seemingly related diversification, a type of diversification focusing on the relatedness of technologies but not of markets, will harm firm performance in emerging economies. Moreover, the lack of implementation capability also makes it difficult for firms to benefit from related diversification. I test these ideas on a population of Chinese firms listed on Hong Kong Stock Exchange from 1993 to 2006. Together, this dissertation shows the choice of firm scope in emerging economies is different from that in developed countries due to the uniqueness of resources and institutional environments. Theoretically, it integrates the resource-based view of firm, resource dependence theory and institutional theory to explain the role of resources and institutional environments in determining firm scope. Empirically, it provides large-sample quantitative evidence in an emerging economy.

Previous studies in operations strategies can be broadly classified as tradeoff focusing on only one operations capability) or synergy building multiple operations capabilities). Tradeoff advocates argue that if firms do not focus on one capability, they would end up being in second place and gradually lose their competitiveness. Scholars supporting synergy, however, believe that the fierce competition forces firms to build more than one capability. Further, results have been inconsistent in terms of which type of operations strategy leads to better performance. This dissertation looked at this issue using a different unit of analysis. Instead of studying firms operations strategies, the supply chains operations strategies were examined. The study results support the contention that the congruity of supply chain operations strategies is positively related to supply chain performance and serves as a pure moderator between supply chain relationship and performance. The research methodology involved a questionnaire survey with usable responses from 282 manufacturing firms providing the data. Exploratory factor analysis was conducted on twenty three questionnaire items designed to measure the operations strategy construct. To test the six hypotheses, several analyses were conducted including multiple regression, cluster analyses, and logistic regression. Five out of six hypotheses were supported while one hypothesis was inconclusive. This dissertation contributes in a variety of ways. First, by studying operations strategy through a different angle the supply chain instead of a firm) this study reconciles results in the relationships between performance and operations strategy and between performance and supply chain relationship. Therefore, this study contributes to reconciling two long-term puzzles in both operations strategy and supply chain management literatures. Second, this research draws on three different disciplines, operations strategy, supply chain management and organization theory power dependence). This interdisciplinary approach provides a broader perspective in operations management research. Third, through this research, guidelines are provided for not only powerful firms but also the weak ones on how to improve their performance through developing different types of supply chain relationships and integrating their operations strategies with their supply chain members.

Firms have increasingly become more tightly coupled with one another and reliant upon their supply chain partners in recent decades. This research examines this trend by evaluating the extent to which supply chain partners are able to directly influence one anothers performance as well as indirectly influence supply chain partners beyond their immediate dyad. It seeks to do so through three essays that focus on an in-depth examination of the bullwhip phenomenon, a study of dyadic bargaining power relationships, and finally an analysis of dyadic financial and inventory performance. Even though a growing body of research has sought to empirically authenticate the existence of the bullwhip effect over the past decade, conclusive validation has thus far been elusive. In Essay 1, utilizing secondary data from 348 firm level supply chain triads, we not only empirically confirm the existence of the bullwhip effect, but also show that other patterns of demand amplification exist as well. When these different patterns are combined together, the amplification patterns effectively cancel each another out such that amplification at any single stage in the supply chain becomes undetectable. In Essay 2, utilizing a secondary dataset of 2861 buyer-supplier dyads and Seemingly Unrelated Regression SUR), we jointly evaluate the extent to which buyers bargaining power is simultaneously associated with improved buyer performance and diminished supplier performance. We find that buyers bargaining power is associated with improved buyer operational performance and diminished supplier operational performance. While supplier financial performance is negatively associated with buyers bargaining power； the buyers financial performance is not significantly improved. In Essay 3, we evaluate the extent to which dyadic supply chain partners influence one anothers financial and inventory performance. Utilizing Compustat database and Markov Chain Monte Carlo methods, a complex Multiple Membership Multiple Classification MMMC) data structure model is evaluated for 10,459 customer observations and 20,706 supplier observations. We find that although corporate effects are the primary contributor to a firms performance variability, dyadic trading partners also significantly impact the firms variable performance. However, the relative proportion of performance variance explained is highly dependent upon the type of customer manufacturer or retailer) or type of supplier manufacturer or non-manufacturer) with which the firm interacts. Overall, the findings of this research contribute to extant literature by not only showing that firms can greatly influence the behavior and performance of one another, but also that they can significantly impact their supply chain partners beyond their own immediate dyad.

This dissertation consists of three studies in the field of corporate strategy. Chapter 1 investigates “legacy” divestitures, the sale or spinoff of a companys historical core business. Operating performance deteriorates in the years following legacy divestitures, and this decline appears to be linked to a loss of intangible resources embedded in legacy businesses, as well as to a disruption of synergies between legacy businesses and other units within the divesting firms. These results illustrate the challenges associated with divestitures that impact firms resources in unexpected ways and shed light on the difficulties firms may experience when they attempt to overhaul their identities. Chapter 2 co-authored with Cynthia Montgomery) considers how the combination of business expertise and share ownership in Fortune 500 directors affects corporate value. Specifically, this work focuses on directors with large shareholdings and comparatively low levels of managerial expertise, whose positions on boards may be due to legacy rather than to high-level business experience. The presence of such directors is associated with lower firm value, and this effect becomes more pronounced the larger the shareholdings owned by these individuals. These results raise new questions about the talent at the table in corporate boardrooms and the cost to shareholders of directors who are highly motivated but cant deliver. Chapter 3 co-authored with Stuart Gilson and Belen Villalonga) investigates equity analysts coverage of pending corporate spinoffs, a setting in which analysts ability to inform investors is potentially very high. Analysts pay little attention to subsidiaries about to be spun off, even though they constitute a significant part of the parent company operations. Moreover, while the level of detail in analyst research about parent companies is significantly related to forecast accuracy, the same is not true for the subsidiaries； additionally, inaccuracy in subsidiary earnings forecasts is associated with inaccuracy in the parent estimates. The forecast errors documented in this chapter exceed those previously found in the context of other restructuring transactions, such as IPOs, mergers, and bankruptcies, suggesting that the complexity associated with spinoffs, combined with analysts apparent disregard for subsidiaries, seem to limit analysts ability to add value as information intermediaries in this setting.

I use a field experiment in a retail services company to analyze the performance effects of providing monetary incentives, performance feedback, and recognition. I find that performance increases by 8 percentage points for sales reps who received only monetary incentives and by 12 percentage points for sales reps who received only recognition. These two effects are not statistically distinguishable from one another. The introduction of performance feedback does not have a statistically significant effect on performance. I further find that the percentage increase for the group that received both monetary incentives and recognition was 11 percentage points below the sum of the performance increases for the groups that only received one of the treatments. Hence, I find evidence that, because the two effects do not add up, monetary incentives and recognition are substitutes in this setting. These treatment effects are heterogeneous in terms of the deciles of the performance distribution and demographic characteristics of the sales reps. I find that the treatments are most effective in the bottom deciles of the performance distribution, and that demographic variables, gender, age, and tenure, influence the effects of the different treatment conditions. I find that monetary incentives are effective for women but not for men, and vice versa for recognition. Older more experienced) reps react more to monetary incentives and performance feedback and less to recognition, and vice versa for younger less experienced) reps. Monetary incentives elicit a positive reaction from high tenure but not from low tenure reps, whereas recognition has a positive effect on the performance of low tenure but not high tenure reps. Furthermore, I find that the performance increase due to the experimental intervention is reduced as the level of intrinsic motivation of the sales reps, measured in a pre- experimental questionnaire, increases. This negative interaction between the treatments and the intrinsic motivation variable is due mainly to the feedback condition. By comparing the pre and post scores of motivation, I find an increase in motivation for reps with a low initial level of motivation and who received good news throughout the experiment.

With the rise of globalization and development, Western companies like Starbucks and Wal-Mart are influencing the individual identities, culture and traditions of the urban youth in China. The subsequent rise of globalization and development influences traditions, culture, and individual identities among Chinas urban youth. Chinas urban youth represent the rising middle class and are major participants in Western consumerism. The significance of the research illuminates the serious concerns related to ethical issues associated with Starbucks and Wal-Marts emerging business practices as potential dilemmas for Chinas future social growth among the urban youth. Critical hermeneutics theorists such as Ricoeur 1992), Gadamer 1999), Herda 1999) and Kearney 2002) illuminate the readers understanding about the research categories for this project, which are ethics and identity. Therefore, Starbucks and Wal-Marts business practices, advertising, and marketing are viewed through the lens of critical hermeneutic theory and related sources in the literature. Critical hermeneutic research provides the necessary framework for understanding the research topic as the research categories of ethics and identity are explored. The data elucidate that the Chinese urban youth desire to express individuality and status through participating in Western consumerism. Specifically the findings are that tension exists between respecting ancient Chinese culture and allowing Western influences into contemporary society. Some of the Chinese urban youth express the difficulty they have balancing participating in Western consumerism and holding onto aspects of their cultural identity. Chinese urban youth view the lifestyle of those in the United States as affluent, abundant in choice, and self-expressive through Western style. Some of the participants convey that global companies must have an understanding of Chinese culture and act ethically in their business ventures. The significance of studying large corporations in urban China is that we are living in an increasingly global community where trade is growing and the far-reaching effects of corporations in the United States are becoming more prevalent around the world.