Institute for Strategy, Technology and Organization

Welcome to ISTO!The Institute for Strategy, Technology and Organization (ISTO) is part of the Munich School of Management atLMU Munich and headed by Prof. Dr. Tobias Kretschmer. It is one of the constituent chairs of the OrganizationsResearch Group, an interdisciplinary research group on organizations and their environment.

MethodsWe focus on the following research and teaching methods: Large-scale quantitative studies (e.g. panel data of firms' activities and characteristics) Primary data collection (where sufficient quantitative data is not available) Phenomenon-driven theoretical models (e.g. for explaining integration decisions depending on industry

characteristics)

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ResearchISTO aspires to participate in and contribute to the worldwideresearch community. We concentrate on the three researchfields of Strategy, Technology and Organization, and inparticular to their intersections. While we often take aphenomenon as a starting point we adopt multiplemethodological approaches and theoretical lenses to tackle theproblem at hand.

TeachingTeaching at ISTO aims to provide students with sound knowledge of management topics, allow them to gainexperience with a broad range of methodological tools and offer them insights into cutting-edge research. Ourcourses concentrate mainly on strategic management, organization and economics in information, andcommunication technology (ICT) industries.

The ISTO Team

Team News (I/II) New onboard at ISTO

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Mareike Seifried joined ISTO as a research and teaching assistant in the winterterm 2016/2017. She completed both her Bachelor of Science in BusinessAdministration as well as her Master of Science in General Management atLudwig Maximilian University of Munich.

Mareike gained first work experience in research as a research and teachingassistant at the Institute for Strategic Management (LMU Munich).

Team News (II/II)

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Moving on

Hakan Özalp joined the ISTO research team in January 2016 as apostdoctoral researcher. Hakan’s research on technology-intensiveindustries and his teaching methods added to our academic portfolio atISTO. In March 2017, Hakan moved to Leeds University Business School asa Lecturer in Strategy.

Thank you for all your contributions at LMU. Good luck for your futurecareer and personal journey!

Dainis Zēgners worked as a Research and Teaching Assistant at ISTO fromApril 2011 and completed his Ph.D. in 2016. His research focuses on theEconomics of Digitization, Industrial Organization and CompetitiveStrategy. In March 2017, Dainis took up a position as an Assistant Professorin the Digital Transformation and Value Creation Group at the University ofCologne.

Thank you Dainis for six years of excellent collaboration. The entire teamwishes you all the best of luck for the future!

ORG News New Project: People Analytics

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People Analytics (or HR Analytics or Evidence-Based HR Management) comprises of a number of theoretical,methodological, and technical approaches that aims at describing, explaining, and estimating the effects ofHuman Resource Management policies and practices on attitudes, behaviors, and performance of employees aswell as economically relevant unit-level outcomes (like productivity, sales volumes, etc.). It builds on the belief thatHRM has a significant economic impact on firms and recognizes the complexity of HRM, and assumes that betterinformation can mitigate complexity issues.

People Analytics benefits from recent technological developments as the increased data richness and availability(including so-called “big data”) alongside new technologies to deal with massive amounts of data leading toreduced costs for data gathering, storing, and merging.

People Analytics aims at improving strategic decision making in HRM through the application of scientificmethods (“evidence-based management” approach) to practically relevant decision problems.

Within the People Analytics initiative we collaborate with corporate partners in the econometric analysis of HRMdata, in using quasi-experimental and insider econometrics approaches, and, eventually, by implementing real-world field experiments.

Further information can be found at www.organizations-research-group.uni-muenchen.de

Munich Summer Institute 2017 (I/II)

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The Munich Summer Institute is a newly established annual conference whichis aimed at stimulating a rigorous in-depth discussion of cutting-edge researchand constitutes a focal point for the interdisciplinary international researchcommunity in the broader field of innovation.

A total of 18 paper presentations, 26 poster slams, three key note speeches andsummer-like temperatures: these were the ingredients for a highly successfulsecond Munich Summer Institute from 29 – 31 May in Munich. Around 80internationally recognized researchers traveled to the Bavarian capital to spendthree days discussing recent developments and challenges of theinterdisciplinary research field of innovation.

As in the previous year, MSI was jointly organized by the Center for Law & Economics of ETH Zurich (StefanBechtold), the Max-Planck-Institute for Innovation and Competition (Dietmar Harhoff), and the Institute forStrategy, Technology and Organization of LMU (Jörg Claussen and Tobias Kretschmer). Each day, the programrepresented the organizers’ respective core research field. Hence, the presentations and poster slams coveredtopics like strategies and competition mechanisms in technology markets as well as newest findings fromentrepreneurship, patent law, and innovation research.

We were delighted to welcome our three keynote speakers Aija Leiponen from Cornell University (“The(unfulfilled) Promise of Data Marketplaces”), Mirjam van Praag from Copenhagen Business School (“Women”),as well as Michael Frakes from Duke University (“Procrastination in the Workplace: Evidence from the U.S. PatentOffice”).

Many thanks to all contributors for an outstanding conference! We are very much looking forward to the next Munich Summer Institute which will take place 4 – 6 June 2018.

Celebrating the Munich Summer Institute’s (MSI) first anniversary

Munich Summer Institute 2017 (II/II)MSI 2017 Moments

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Sessions

Opening Speechby Tobias Kretschmer

Poster SessionCoffee Break

Academy of Management

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Johanna participated in the 77th Annual Meeting of the Academy of Management

Conference Reception at Atlanta Aquarium

From 4th to 8th August, the 77th Annual Meeting of the Academy of Management took place in Atlanta. For me this has been the first time at the AoM, the largest management conference worldwide. This has been a truly exciting experience and motivated me to move forward with my own research!

On the first days of the conference, I participated in the Doctoral Consortium of the BPS (Business, Policy andStrategy) Division. In the Consortium, 40 doctoral students from universities around the world had the opportunityto meet and learn from senior faculty. During the Consortium we discussed topics such as publishing, theacademic job market, challenges in the dissertation, and teaching. Additionally, I received inspiring and helpfulcomments about my own research.

Over the next few days, I had time to visit further presentationsand discussion sessions on interesting topics related to my ownresearch. I had the opportunity to meet many well-known andemerging researchers from other universities and to discusscurrent research projects with them.

This year’s Welcome Reception of the conference took place inthe impressive Atlanta Aquarium. The aquarium is one of thelargest in the world and hosts beluga whales and whale sharksas well as turtles and clown fishes.

All in all, it has been a very successful conference and I amlooking forward to continuing my work to present my newresults at the next AoM!

Research (I/III) The Summer Research Workshop at ISTO

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Johanna presented her project about firm response to failure, Michail talked about anonymous marketplaces andMareike presented the state of her current project on careers in online labor markets. Johannes introduced atheoretical model that could later serve as the basis for a dissertation paper.

In addition, Pooyan Khashabi inspired us with a future project regarding employee engagement on virtualinnovation platforms which will be in collaboration with our industry partners. Tobias Kretschmer and JörgClaussen talked about research grant applications. While Tobias Kretschmer gave general insights on the processof grant applications, Jörg Claussen reported on a grant application he was working on.

Our intention was to combine creativity, research, and fun in our workshop. For the extended lunch break, ourPhD students organized a series of games. Seniors played against juniors and they won the games! The old dogsstill know a trick or two…

In the evening, Tobias Kretschmer invited us to his home for a barbecue and surprised us with his skills at thegrill where he created delicious dishes. The Summer Research Workshop was a lot of fun!

This year's Summer Research Workshop on 10th August 2017 held manyexciting presentations and games. ISTO members presented their research ideasand new projects where the team provided them with feedback and discussed thefuture direction of their projects.

Research (II/III)

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In the working paper “Follow the Money: Piracy and Online Advertising” by Michail Batikas, Jörg Claussen(both ISTO), and Christian Peukert (U Zurich), the authors study a self-regulatory policy of the onlineadvertising sector initiated by the European Commission.

Online copyright enforcement, in the form of either direct action against the supply-side (via websiteshutdowns) or the demand-side (via individual lawsuits against users), has not been very effective in reducingpiracy. Regulators have therefore proposed the so-called “follow the money” approach. Because the mainsource of revenue for infringing websites often comes from online advertising, the idea is that cutting access toadvertisers could lower the financial incentives for website owners.

The authors have collected historical data on the advertising services by using novel techniques associated witha large number of piracy websites and corresponding set of legitimate “placebo” websites before and after thefirst steps of a self-regulatory effort in the European Union were put in place. Preliminary results suggest thatadvertising services indeed reduce their activities on piracy websites, however only those that are most likely tobe directly affected by the regulation.

Current Working Papers (I/III): Follow The Money: Piracy and Online Advertising

Research (II/III)

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Current Working Papers (II/III): Pay-for-performance doesn’t work? Look at your local competition!

The study “Heterogeneous Effects of Pay-for-performance (PfP)with Market Competition: Evidence from A Randomized FieldExperiment” by Pooyan Khashabi, Tobias Kretschmer (both ISTO),Matthias Heinz (U Cologne), Nick Zubanov (U Konstanz), and GuidoFriebel (Goethe U) investigates the effectiveness of pay-for-performance schemes based on companies’ local competition level.

Their paper analyzes the reaction of employees working in 193 shopsof a bakery chain to a PfP scheme. The study predicts that these

schemes are most effective when competition is moderate: too little competition creates low incentivesamong employees to put more effort because there is little extra market to gain. Excessive competitionincreases the likelihood of competitor response and thus, discourages employees to exert high levels of effort.Based on a field experiment with bakery shops, the study provides supportive evidence for its theoreticalprediction, showing that the PfP scheme caused the biggest sales growth among shops located in moderatecompetition.

While the literature chiefly emphasizes the role of employee- and firm-specific factors in design of PfP, theresults of this study imply that firms have to take their local competitive environment into account as wellwhen implementing incentive schemes.

Research (II/III)

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The study “Technology Disclosure and Capital Market Uncertainty: The Case of Patents” by PooyanKhashabi (ISTO), Ali Mohammadi (U Gothenburg) and Mehdi Beyhaghi (U Texas) focuses on a key dilemma ofpublic innovative companies. On the one hand, they need to invest in R&D to gain competitive advantage andoutperform their competitors. On the other hand, R&D investments disrupt the smooth flow of earnings, and actas a source of uncertainty and pressure on firms’ management, leading to managerial myopia.

Their study investigates whether, and under what conditions, patents can resolve the R&D and uncertaintydilemma of public firms. By taking advantage of a change to the US IP law, the study finds that patenting,through disclosing technological details, reduces the uncertainty pressure on innovative companies in capitalmarkets. However, when patents are complex and very innovative, the effectiveness of this solution is weak.

While patent value has mostly been viewed through their protection function or disclosure to peer inventors,this study highlights another aspect of patents’ value, their informational channel to capital markets in reducinguncertainties and cost of capital for innovative companies.

Current Working Papers (III/III): Excessive R&D and uncertainty dilemma: patenting can be a solution

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New Publications (Selection)

Claussen, J.; Kretschmer, T.; Köhler, R. (Forthcoming): Target Choice and Unique Synergies in Global Mobile Telephony: A Dyadic Approach. Industrial and Corporate Change.

Peukert, C.; Claussen, J.; Kretschmer, T. (2017) : Piracy and Box Office Movie Revenues: Evidence from Megaupload. International Journal of Industrial Organization 52: 188-215.

Zegners, D.; Kretschmer, T. (2017): Competition with Aftermarket Power when Consumers are Heterogeneous. Journal of Economics & Management Strategy 26(1): 96-122.

Research (III/III)

ISTO Successful on the Academic Job MarketNew Munich School of Management Job Market Fellowships

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This year marked an exiting year for the ISTO. Three of our members, Hakan Özalp andVirgilio Failla, both Postdocs at the ISTO, and Dainis Zegners, who finished his Ph.D. atISTO in 2016, were applying for positions on the academic job market. Together, theypracticed their job-talks, browsed job-ads, discussed job market strategies, and kept upeach other’s confidence during the job-search. The other members of the institute, bothsenior and junior, also supported the trio both with advice and feedback and by keepingup their morale. Hakan and Dainis also attended the Academy of ManagementConference in Anaheim, USA, where they interviewed with potential employers.

At the same time, this year marked the introduction of the Munich School ofManagement Job Market Fellowships. With the fellowship, the Munich School ofManagement wants to pursue the goal of placing its job market candidates atinternationally prestigious academic institutions. To achieve this, the fellowship eachyear supports selected graduates who go on the academic job market. Dainis and Hakanwere the very first job market fellows. Both gratefully acknowledge the generous supportthey received from the faculty.

In the end, the job market turned out very well for all three: Virgilio started a positionas Lecturer in Entrepreneurship at the Management School of the University of Bath inSeptember 2016, Dainis joined the University of Cologne in April 2017 as AssistantProfessor, and Hakan joined the University of Leeds as Lecturer in May 2017. We wish allof them good luck on their future career paths and hope to see them visiting the ISTOand Munich often!

Guests at ISTO and ORG (I/II)

Rocio Bonet (IE Business School)

Stephen Hansen(University of Oxford)

Andy Wu(Harvard Business School)

Mu-Jeung Yang(University of Washington)

Chad Syverson(University of Chicago)

Johannes Luger(University of St. Gallen)

Evila Piva(Politecnico Milano)

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Victor Bennett(Duke University)

Claudio Panico(Università Bocconi)

Stefano Tasselli(Erasmus University Rotterdam)

Niko Matouschek(Northwestern University)

Gianluigi Giustiziero(SKEMA Business School)

Guests at ISTO and ORG (I/II)

Bentley McLeod(Columbia University)

Ananya Sen(MIT Sloan School of Management)

Benjamin Friedrich(Kellogg School of Management)

Ludvig Levasseur(PSL-Université Paris-Dauphine)

Michael Jacobides(London Business School)

Clint Chadwick(University of Kansas)

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Stephen Leider(University of Michigan)

Torsten Biemann(University of Mannheim)

Institute for Strategy, Technology and OrganizationMunich School of ManagementLudwig Maximilian University of Munich

Kaulbachstraße 4580539 MunichGermany

T +49 (0)89 2180 6270F +49 (0)89 2180 16541M isto@bwl.lmu.de

ORGOrganizations Research GroupLudwig Maximilian University of Munich

Kaulbachstraße 4580539 MunichGermany

T +49 (0)89 2180 6710F +49 (0)89 2180 16541M g.zimmermann@lmu.de