2

Focus—How firms “manage” the development of Internet products for the $140B IT industry

Impact—What “management” approaches are linked to firm-level outcomes for Internet firms

Why—What factors are motivating the use of new management approaches such as “agile methods” Market turbulence Hyper-competition Technological peculiarities

3

$4.2$4.9$0.9$3.7$4.2$3.8

$1.2

$10.4

$9.4

$1.1

$7.3

$4.5

$0.4$6.7 $4.3

$0.4$1.3

$2.6

$50.2

$9.9 $8.8Automotive

Banking

Pharmaceuticals

Chemicals

Construction

Consulting

Consumer Goods

Distribution

Electronics

Energy

Health Care

Travel

Technology

Insurance

Transportation

Manufacturing

Entertainment

4

Links—Examine links between use of agile methods and firm-level outcomes

Relationships—Determine if principles of agile methods related to firm outcomes Better products Satisfied customers Profitability and marketshare

5

Powerful new prototyping languages—HTML, Java, Visual Basic, Visual C++, XML, etc.

Easy-to-use technology—Enables any firm to create extremely successful Internet products

Rapid-fire trial-and-error—Enables firms to create an infinite number and variety of products

Accelerated innovation—Increases rate of innovation, market turbulence, and competition

6

Early customer involvement—Customers participate in actual product development

Iterative releases—Rapid successions of early prototypes for customers to see and use

Flexibility—Process and product philosophy adaptable to rapidly changing market conditions

Self organizing teams—Small groups are empowered to effect organizational outcomes

7

Technology acceptance—Customers believe Internet products are useful and beneficial

Web satisfaction—Customers are satisfied with how Internet products operate and perform

Online trust—Customers believe Internet products are dependable for conducting business

Firm performance—Greater short and long-term wealth creation (e.g., EVA, Tobin’s Q, etc.)

8

Flexible processes—Pine (1992) compared principles of mass production and flexibility Principles—Identified 22 major principles of mass

customization or flexibility Turbulence—Tested an instrument for linking

turbulent market conditions to flexibility on 224 firms Self organizing teams—Herbst (1962) compared

principles of traditional and self organizing teams Productivity—Developed a framework to analyze

productivity of traditional vs. self organizing teams Performance—Determined self organizing teams

performed at least as good as traditional teams

9

Technology acceptance—Davis (1986) adapted theory of reasoned action (TRA) for technology usage Beliefs—Ajzen and Fishbein (1975) determined beliefs

are a strong predictor of human behavior End user acceptance—Davis (1986) adapted TRA for

determining if customers will use new technology Web satisfaction—Torkzadeh and Dhillon (2002)

validated use of value focused thinking for the Internet Value focused thinking—Keeney (1999) used multi-

attribute analysis to identify customer objectives Survey research—Torkzadeh and Dhillon (2002)

surveyed over 600 users to validate Keeney’s findings

10

Online trust—McKnight et al. (2002) adapted theory of reasoned action (TRA) for determining Internet trust Beliefs—Ajzen and Fishbein (1975) determined beliefs

are a strong predictor of human behavior Internet trust—McKnight et al. (2002) adapted TRA for

determining if customers trust use of the Internet Firm performance—Saeed et al. (2005) developed a

model linking Internet competence to firm performance Service profit chain—Heskett et al. (1994) linked

intangible measures to revenue growth and profitability Internet competence—Saeed et al. (2005) adapted

SPCs for measuring Internet competence and used EVA and Tobin’s Q for measuring profitability of Internet firms

11

Dearth of scholarship—Few studies have attempted to build reliable and valid scholarly theoretical conceptual models of agile methods

Lack of scholarly outcomes—Few studies identify scholarly outcomes of using agile methods (e.g., theory of reasoned action, etc.)

Few measures—Few studies have measures of using agile methods to manage Internet product development by Fortune 500 firms

12

Early customer involvement—Is the use of early customer involvement linked to firm-level outcomes among Internet firms?

Iterative releases—Is the use of iterative releases linked to firm-level outcomes among Internet firms?

Flexibility—Is the use of flexibility linked to firm-level outcomes among Internet firms?

Self organizing teams—Is the use of self organizing teams linked to firm-level outcomes among Internet firms?

13

FirmSize

FirmPerformance

TechnologyAcceptance

FlexibleProcesses

IterativeReleases

WebSatisfaction

Early CustomerInvolvement

Self OrganizingTeams

OnlineTrust

AgileMethods

CustomerSatisfaction

H 2 (+)

H 3 (+)

FirmPerformance

H 4 (+)

H 1 (+)

H13 (+)

H14 (+)

H15 (+)

H16 (+)

H 5 (+)

H 6 (+)

H 8 (+)

H 9 (+)

H10 (+)

H 7 (+)

H11 (+)

H12 (+)

14

Flexible manufacturing—Lean thinking (1970s) and linear optimization (1960s)

Autonomous work groups—Self directed teams vs. division of labor (1960s)

Theory of reasoned action—Link between belief, attitude, intention, and behavior (1970s)

Balanced scorecard—Link between intangible assets and firm performance (1990s)

Resource based view—Link between firm specific capabilities and performance (1980s)

15

Principles—No discrete, definitive, or finite set of principles for agile methods

Argumentative—Relationships between agility and firm outcomes are debatable

Theory—Operationalization of a scholarly theoretical conceptual model is a challenge

Reliability and validity—Few scholarly measurement instruments from which to choose

16

AgileMethods forDeveloping

InternetProducts

---(Highsmith,

2002)

IBM’sAS/400

DevelopmentApproach

---(Sulack,

et al, 1989)

Microsoft’sSynch andStabilizeApproach

---(Cusumano,et al, 1995)

Netscape’sInternet

TimeApproach

---(Cusumano,et al, 1998)

InternetIndustry’sAdaptiveApproach

---(MacCormack,

1998)

TechnologyAcceptance

---(Davis,1986)

WebSatisfaction

---(Torkzadeh,et al, 2002)

OnlineTrust

---(McK night,et al, 2002)

FirmPerformance

---(Saeed,

et al, 2005)

Theory ofReasoned

Action---

(Fishbein,et al, 1975)

ValueFocusedThinking

---(K eeney,

1999)

OrganizationalTrust

---(Mayer,

et al, 1995)

ServiceProfitChain

---(Heskett,

et al, 1994)

EarlyCustomer

Involvement---

(Von Hippel,1978)

IterativeReleases

---(Basili,

et al, 1975)

FlexibleProcesses

---(P ine,1992)

SelfOrganizing

Teams---

(Herbst,1962)

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