Research Spotlight

Interplay between Constraints and Rewards in Innovation Tournaments: Implications for Participation

Prof. Swanand Deodhar
The shifting paradigms of information and knowledge flows, enabled by the Internet, are creating novel forms of organizations. A testament to this claim is the increasingly popular business practice of seeking resources outside the traditional boundaries of organizations. Firms spanning several domains such as media and entertainment, retail, finance, and manufacturing are relying on online intermediaries to "on-demand" orchestrate a "Crowd" of globally dispersed individuals, which can provide resources of significant economic value. Given the immediate appeal of this so-called "crowdsourcing" approach (e.g., accessing the long-tail of resource providers), it is not surprising to see its widespread adoption.
One of the mechanisms to organize crowdsourcing is through innovation tournaments, which are essentially pre-defined tasks (e.g., developing a new software functionality or building a prediction model for a complex problem) that need to be completed within a specific time- frame. When packaged as "tournaments," these tasks are expected to attract solutions from individuals who compete with each other to provide the best possible solution. Because crowd members develop solutions independently, the organization is expected to receive multiple solutions from several parallel paths.
However, prior research indicates that attracting crowd members to a tournament is non-trivial. To mitigate this challenge, the organizer can configure different aspects of the tournament. In this study, I examine the interplay between two such features of innovation tournaments. First, the organizer can offer a monetary reward. Although the reward is expected to drive up the participation by appealing to the crowd members' extrinsic motivation, it can deter participation as higher reward creates the perception of a difficult and complex task. Thus, the monetary reward can filter out contestants, reducing the participation, and hence, the parallel-path advantages. In contrast, the organizer can also include competitive constraints that are intended to create a more "level playing field," which, in turn, can attract crowd members. Thus, monetary reward and competitive constraints can be construed as tournament design features with competing implications for participation.
By drawing from a dataset of real-world innovation tournaments, the study presents a tournament-level analysis in which the association between the two aspects (monetary reward and competitive constraints) and participation is estimated. The findings reveal that while the two predictors have the anticipated association with participation, they also exhibit significant interaction wherein competitive constraints can offset the perception of complexity created by high monetary reward. To sum, the study highlights the interplay between two key design aspects of innovation tournaments.
This study is part of a bigger research program around innovation tournaments that my colleagues and I are actively pursuing. We certainly believe that, as the Internet reaches the masses, innovation tournaments, and crowdsourcing in general, are going to be the dominant trends for businesses regardless of industry and geography. As we hope to build on this research paper, we welcome your thoughts about the same.

Covid-19's impact on supply chain decisions: Strategic insights from NASDAQ 100 firms using Twitter data

Prof. Sourav Borah
As the Corona virus pandemic grew across nations, I was extremely concerned about the way supply chain challenges would disrupt the global economy. Part of my concerns were driven by shortages of products in our local grocery stores. I was also approached by many companies and industry bodies which asked me to provide suggestions about how the "new normal" would look like. I started discussing the issue with many of my academic colleagues including my co-authors Professor Amalesh Sharma, Mays School of Business, Texas A&M University and Professor Anirban Adhikary, IIM Udaipur. This was in one of these conversation, we found a tweet from a company in China that had adopted technology to combat the supply chain challenges. This led to our investigation of Twitter data to understand the challenges faced by companies and provide strategic recommendations.
We collected data from 89 firms. We looked at relevant tweets from NASDAQ 100 firms from January 23rd, 2020 (when Hubei province initiated lockdown) to April 30th, 2020. We also collected data from individual users and supply chain experts to have a more comprehensive view. Finally, we had 41,986 tweets from NASDAQ 100 firms, 35,000 tweets from individual users, and 7,359 tweets from supply chain professionals. We analysed the data using word clouds (Figure 1), unigrams, bigrams, and trigrams that provided us required information regarding those supply chain aspects which were getting attention in Twitter.
Figure 1: Word cloud of 100 most frequent words.
Common topics of discussion in Twitter were related to (a) demand supply challenges during Covid-19 (while some companies experienced decline in demand, others experienced a surge in demand), (b) technological challenges during Covid-19 (while many companies have adopted technological solutions to combat the virus, all firms were not at a similar level of technology readiness. Again, there were concerns around data breaches. The data also revealed that companies were looking for solutions which enhance visibility across the value chain, increase efficiencies and last mile delivery.), (c) building a resilient supply chain and (d) sustainable supply chain challenges (our data suggest that during Covid-19, companies were moving beyond economic sustainability and issues associated with social sustainability (e.g., employee wellbeing) and environmental sustainability had also gained prominence).
Based on the themes discussed, we provided some strategic recommendations to firms about how to design a futuristic supply chain. We urged companies to focus on sustainable supply chain, provide a dynamic response (firms need to focus on multiple best practices explored or invented by their suppliers, competitors, and ecosystem), leverage technology (to capture data across the value chain, enhance visibility through technology and monitor supply partners), develop a collaborative relationship with suppliers, diversification of the supply base and synchronize strategic processes (a recent IBM report shows that intelligent workflows will dissolve cellular processes and mechanize processes that can improve efficiencies across the supply chain).
The entire process of understanding the challenges was quite value enriching. This paper helped us to understand not only the supply chain challenges associated with Covid-19, but also the importance of Twitter data. We realized that Twitter data can serve as an effective tool for exploratory research. Identifying themes which were not intuitive may emerge as we explore Twitter data. This research also helped us to provide insight into multiple businesses across markets to combat supply chain challenges during rare events such as Covid-19.