Idea Generation and the Quality of the Best Idea

In a wide variety of settings, organizations generate a number of possible solutions to a problem—ideas—and then select a few for further development. We examine the effectiveness of two group structures for such tasks—the team structure, in which the group works together in time and space, and the hybrid structure, in which individuals first work independently and then work together. We define the performance of a group as the quality of the best ideas identified. Prior research has defined performance as the average quality of ideas or the number of ideas generated, ignoring what most organizations seek, a few great ideas. We build a theory that relates organizational phenomena to four different variables that govern the quality of the best ideas identified: (1) the average quality of ideas generated, (2) the number of ideas generated, (3) the variance in the quality of ideas generated, and (4) the ability of the group to discern the quality of the ideas. We test this theory with an experiment. We find that groups organized in the hybrid structure are able to generate more ideas, to generate better ideas, and to better discern the quality of the ideas they generate. Moreover, we find that the frequently recommended brainstorming technique of building on others\u27 ideas is counterproductive; teams exhibiting such buildup neither create more ideas, nor are the ideas that build on previous ideas better

Electric Vehicles with a Battery Switching Station: Adoption and Environmental Impact

The transportation sector's carbon footprint and dependence on oil are of deep concern to policy makers in many countries. Use of all-electric drive trains is arguably the most realistic medium-term solution to address these concerns. However, motorist anxiety induced by an electric vehicle's limited range and high battery cost have constrained consumer adoption. A novel switching-station-based solution is touted as a promising remedy. Vehicles use standardized batteries that, when depleted, can be switched for fully charged batteries at switching stations, and motorists only pay for battery use. We build a model that highlights the key mechanisms driving adoption and use of electric vehicles in this new switching-station-based electric vehicle system and contrast it with conventional electric vehicles. Our model employs results from repairable item inventory theory to capture switching-station operation; we embed this model in a behavioral model of motorist use and adoption. Switching-station systems effectively transfer range risk from motorists to the station operator, who, through statistical economies of scale, can better manage it. We find that this transfer of risk can lead to higher electric vehicle adoption than in a conventional system, but it also encourages more driving than a conventional system does. We calibrate our models with motorist behavior data, electric vehicle technology data, operation costs, and emissions data to estimate the relative effectiveness of the two systems under the status quo and other plausible future scenarios. We find that the system that is more effective at reducing emissions is often less effective at reducing oil dependence, and the misalignment between the two objectives is most severe when the energy mix is coal heavy and has advanced battery technology. Increases in gasoline prices (by imposition of taxes, for instance) are much more effective in reducing carbon emissions, whereas battery-price-reducing policy interventions are more effective for reducing oil dependence. Taken together, our results help a policy maker identify the superior system for achieving the desired objectives. They also highlight that policy makers should not conflate the dual objectives of oil dependence and emissions reductions as the preferred system, and the policy interventions that further that system may be different for the two objectives. This paper was accepted by Yossi Aviv, operations management. </jats:p

Essays in operations management

This dissertation is based on three essays that study operational strategies to manage environmental uncertainty. In essay 1, we examine the costs and benefits of different supply chain structures in managing multi-product demand uncertainty. In particular we analyze the strategic performance of delayed differentiation and early differentiation in supply chains. We demonstrate that the conventional wisdom arguing for delayed differentiation may be strategically unsound. In essay 2, we examine the role of strategies that mitigate the effects of product development uncertainty. We create a multi-year data-set on product development pipelines and the financial performance of large pharmaceutical firms. We examine the effect of risk mitigating strategies, such as development of backup compounds on the financial performance of firms and find that these strategies lead to superior financial outcomes. In essay 3, we examine the role of demand uncertainty on a multi-tier supply chain. We examine the structure of advanced purchase discounts that lead to efficient information transmission in the supply chain. We characterize their benefits, costs and provide recommendations on administration of advance purchase discounts

Essays in operations management

This dissertation is based on three essays that study operational strategies to manage environmental uncertainty. In essay 1, we examine the costs and benefits of different supply chain structures in managing multi-product demand uncertainty. In particular we analyze the strategic performance of delayed differentiation and early differentiation in supply chains. We demonstrate that the conventional wisdom arguing for delayed differentiation may be strategically unsound. In essay 2, we examine the role of strategies that mitigate the effects of product development uncertainty. We create a multi-year data-set on product development pipelines and the financial performance of large pharmaceutical firms. We examine the effect of risk mitigating strategies, such as development of backup compounds on the financial performance of firms and find that these strategies lead to superior financial outcomes. In essay 3, we examine the role of demand uncertainty on a multi-tier supply chain. We examine the structure of advanced purchase discounts that lead to efficient information transmission in the supply chain. We characterize their benefits, costs and provide recommendations on administration of advance purchase discounts

Electric Vehicles with a Battery Switching Station: Adoption and Environmental Impact Electric Vehicles with a Battery Switching Station: Adoption and Environmental Impact ELECTRIC VEHICLES WITH A BATTERY SWITCHING STATION: ADOPTION AND ENVIRONMENTAL IMPA

Abstract. Widespread adoption of Electric Vehicles can limit the environmental impact of transportation and reduce oil dependence. However, limited range and high upfront battery costs have limited consumer adoption. A novel switching-station-based solution is extensively touted as a promising remedy that resolves range anxiety. Vehicles use standardized batteries that when depleted can be switched for fully charged batteries at switching stations. Further, instead of making an upfront battery purchase, motorists pay for miles driven. We develop a stylized analytical model that captures the key tradeoffs in the adoption of electric vehicles to assess the effectiveness of this remedy. Our model uses a classical repairable item inventory model to capture switching station operation; we combine it with a moral hazard construct from the contracting literature to capture customer adoption and usage. We find that electric vehicles with switching stations can indeed incent adoption and reduce oil dependence but, paradoxically, we also show that this increased adoption may not necessarily benefit the environment. A profit-maximizing operator increases adoption by limiting motorist range anxiety and the effective marginal costs of driving, which leads motorists to increase their driving, and hence increase electricity consumption. Depending on the source of electricity, this can be more harmful to the environment than the nonadoption of electric vehicles. Further, we show that switching-station electric-vehicle adoption and driving are strategic complements; thus, any policy intervention that increases adoption will also increase driving. Using real data, we calibrate the model and show numerically that with the current generation mix in the USA, switching-station electric vehicles would lead to reduced oil dependence and net environmental benefits, but in just 10 years electric vehicles with switching stations would be harmful to the environment. Further, well-intended policy interventions such as battery purchase subsidies, and seemingly helpful battery technology advances can actually be harmful to the environment

The risk-driven business model : four questions that will define your company

241 p. ; 23 cm

The risk-driven business model: four questions that will define your company

241 p. ; 23 cm

The Strategic Perils of Delayed Differentiation

The value of delayed differentiation (also known as postponement) for a monopolist has been extensively studied in the operations literature. We analyze the case of (imperfectly) competitive markets with demand uncertainty, wherein the choice of supply chain configuration (i.e., early or delayed differentiation) is endogenous to the competing firms. We characterize firms' choices in equilibrium and analyze the effects of these choices on quantities sold, profits, consumer surplus, and welfare. We demonstrate that purely strategic considerations not previously identified in the literature play a pivotal role in determining the value of delayed differentiation. In the face of either entry threats or competition, these strategic effects can significantly diminish the value of delayed differentiation. In fact, under plausible conditions, these effects dominate the traditional risk-pooling benefits associated with delayed differentiation, in which case early differentiation is the dominant strategy for firms, even under cost parity with delayed differentiation. We extend the main model to study the effects of alternate market structures, asymmetric markets, and inventory holdback. Our results--in particular that for a broad range of parameter values, early differentiation is a dominant strategy even under cost parity with delayed differentiation--are robust to these relaxations.postponement, commitment, risk pooling, competition, strategy