Technology and Operations Management (TOM) Doctoral Alumni Research Workshop

August 22-23, 2013

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Technology & Operations Management Unit

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Abstracts
 
Session 1: The Effects of Workload in Healthcare
Thursday, August 22, 1:15-2:35 - Cumnock 220
 
An Empirical Study of the Spillover Effects of Workload on Patient Length of Stay
Jillian Berry Jaeker - Doctoral Candidate, Harvard Business School
 
We use two years of inpatient data from 243 California hospitals to quantify the relationship between hospital-level workload and patient length of stay (LOS) and its “spillover” effects across patient types.  Patients are categorized as medical or surgical, and the effects of same type patient workload (occupancy) on LOS are analyzed. The analysis is repeated with workload replaced by other type patient occupancy, providing a “spillover” effect. We find that the effects of inpatient workload on LOS spillover across patient types, which we theorize results from most inpatients, regardless of type, utilizing the same shared resources (e.g. pharmacy and laboratory). These spillover effects remain even while we find that the effects of workload vary at different time points during a patient’s stay: LOS increases as inpatient workload on the day of admission increases, while inpatient workload at the end of the stay has a U-shaped effect on LOS.
Joint work with Anita Tucker (Harvard Business School)
 
A Day in the Saddle Can Take its Toll: The Impact of Accumulated Time, Work Intensity and Work Breaks on Hand Hygiene Compliance
Brad Staats - Associate Professor, University of North Carolina
 
In order to deliver high quality, reliable, and consistent services safely, organizations develop professional standards. These standards may be adopted from external agencies (e.g., professional industry groups, external regulators) or developed through the internal documentation and proliferation of best practices. Despite the communication and reinforcement of these standards, they are often not followed consistently. Although previous research suggests that high job demands are associated with declines in compliance over lengthy intervals, we argue that the impact of job demands might accumulate more quickly – even within the course of a single day. We tested this hypothesis using longitudinal field observations of over 4,157 caregivers’ in the healthcare industry whose compliance with hand hygiene guidelines was recorded in 35 hospitals on 13.7 million separate occasions. Our results demonstrated that, on average, hand hygiene compliance rates dropped by 7.2 percentage points from the beginning to the end of a typical, 12-hour work shift. Further, increased work intensity magnified this decline in compliance, whereas longer breaks between work shifts increased subsequent compliance rates. The potential and negative implications of these declines in hand hygiene compliance for patient safety are discussed as are the implications of our findings for job design.
Joint work with Hengchen Dai (Wharton), Katherine L. Milkman (Wharton), and David A. Hofmann (University of North Carolina)
  
Session 2: Designing Experiences for Individuals
Thursday, August 22, 3:00-4:20 - Cumnock 220
  
The MBA Capstone Strategy Course: Defining Measuring and Teaching Reflective Skills
Syeda Noorein Inamdar - Assistant Professor, San Jose State University
 
As business environments get more complex and uncertain, the ability to engage in reflective thinking is becoming increasingly important for effective management decision making. Prior research on management education has found that traditional pedagogies are ineffective in developing reflective thinking and practical decision making skills. In response to this concern, this paper develops the definition, model, instrument and rubric for teaching reflective skills in the MBA capstone strategy course. The rubric is applied to measure the extent to which different curricular practices are teaching the skill of reflective thinking. The paper concludes with suggesting different curricular practices that can be incorporated into the capstone course to teach reflective skills and enhance learning. The contribution of this research is that it provides empirical evidence to better design strategy courses that will prepare students to more thoughtfully address complex business challenges.
  
The Customer May Not Always Be Right: Customer Compatibility and Service Performance
Ryan Buell - Assistant Professor, Harvard Business School
 
While operational efforts to improve service satisfaction ratings tend to be inwardly directed (e.g. investments in training, process improvements, automation, etc.), we investigate the degree to which satisfaction outcomes are influenced by an outward consideration: the customer’s compatibility with the operating system. We decompose the variance of 58,294 face-to-face retail banking transactions, quantifying the relative importance of customer, employee, process, location, and market-level effects on transaction satisfaction. In our models, which explain roughly a quarter of the aggregate variance in customer satisfaction, customer-level differences account for 96-97% of this variance. Customers tend to report relatively consistent satisfaction across transactions, but some customers are habitually more satisfied than others. Subsequent analysis suggests that these differences are explained in part by the degree of compatibility between each customer and the firm’s operating system. Customers whose product selection diverges most significantly from the products of typical customers are 11.63% less likely to provide a perfect satisfaction rating than the least divergent customers. Moreover, branches that serve customers whose demographic characteristics diverge most significantly from the characteristics of customers typically served by the firm are 5.6% less likely to earn perfect satisfaction ratings than branches serving the least divergent customers. Consistently, in a cross-firm analysis of 81 retail banking institutions, we find that firms facing the most customer heterogeneity receive overall satisfaction ratings that are 17.2% below firms facing the least heterogeneity over the relevant range. These results suggest that customer compatibility with the operating system is an important determinant of the satisfaction a service firm can deliver.
Joint work with Dennis Campbell (Harvard Business School) and Frances Frei (Harvard Business School)
  
Session 3: Structuring Intraorganizational Interactions
Thursday, August 22, 5:00-6:20 - Cumnock 220
  
Geography and Power in an Organizational Forum: Evidence from the U.S. Senate Chamber
Christopher Liu - Assistant Professor, Rotman School of Management
 
We examine the role that geography plays in structuring interactions within an organizational setting designed to promote broad patterns of interaction: the organizational forum. We propose that within a forum, an individual’s location structures his or her access to peer support; but individuals with power (i.e., those who control the flow of organizational resources) can transcend these geographic constraints. We examine these propositions with data collected on strategic actors in the U.S. Senate Chamber. Using a dyad fixed effects approach, time-varying controls, selection-on-observables estimation, and quasi-exogenous shocks to seating arrangements, we find support for our propositions. These results contribute to our understanding of strategic interaction patterns, with an emphasis on the geographic scaffold upon which strategic actions are constructed.
Joint work with Jillian Chown (Rotman School of Management)
 
High-Value Outsourcing:  The Impact of Team Structure and Capabilities on Complex and Uncertain Offshoring Projects
Saikat Chaudhuri - Adjunct Associate Professor, Wharton School of Management
 
Extant research on offshore outsourcing has largely studied non-core, fairly routinized tasks, such as information technology (IT) services and business process outsourcing (BPO).  However, companies are increasingly outsourcing higher-end work entailing greater complexity and uncertainty, including knowledge-intensive services like new product development.  We investigate to what extent the offshore outsourcing approach can effectively transfer to such projects, by developing a simulation model based on field research of a sample of global software development projects conducted by a leading Indian outsourcing vendor with its customers.  We contrast the more virtualized global delivery model with the more traditional consulting model and find that an offshore outsourcing approach based on distinct strategic complementarities can handle sophisticated higher-value work, by adopting a suitable team structure and capability composition.  The results bear implications for traditional notions of firm boundaries and organizational forms.
Joint work with Abhijit Mandal (Cass Business School)
  
Session 4: Managing Inventory in Retail
Friday, August 23, 8:30-9:50 - Cumnock 220
  
Improving Store Liquidation
Nathan Craig - Doctoral Candidate, Harvard Business School
 
Store liquidation is the time-constrained divestment of retail outlets through an in-store sale of inventory. The retail industry depends extensively on store liquidation, not only as a means for investors to recover capital from failed ventures, but also to allow managers of going concerns to divest stores in efforts to enhance performance and to change strategy. Recent examples of entire chains being liquidated include Borders Group in 2012, Circuit City in 2009, and Linens `n Things in 2008; the value of inventory sold during these liquidations alone is $3B. The store liquidation problem is related to but also differs substantially from the markdown optimization problem that has been studied extensively in the literature. This paper introduces the store liquidation problem to the literature and presents a technique for optimizing key decision variables, such as markdown, inventory, and store closing decisions during liquidations. We show that our approach could improve net recovery on cost (i.e., the profit obtained during liquidations stated as a percentage of the cost value of liquidated assets) by 2 to 7 percentage points in the cases we examined. The paper also identifies ways in which current practice in store liquidation differs from the optimal decisions identified in the paper and traces the consequences of these differences. 
Joint work with Ananth Raman (Harvard Business School)
  
Do High and Low Inventory Turnover Retailers React Differently to Demand Shocks?
Saravanan Kesavan - Assistant Professor, University of North Carolina
 
In this paper, we identify quantity- and price-responsiveness as two mediating mechanisms that distinguish how high- and low-inventory-turnover retailers (HIT and LIT retailers, respectively) can manage demand shocks. Using quarterly firm-level data of 460 U.S. retailers between 1985 and 2009, we find that HIT retailers are able to respond quickly by changing their purchase quantities in response to demand shocks, while LIT retailers primarily rely on price changes to manage demand shocks. On average, HIT and LIT retailers appear to be adept at using quantity- and price- responsiveness to avoid excesses and shortages during demand shocks. However, the negative financial impact of excesses and shortages, when they occur, can be 20 times more severe for LIT retailers compared to HIT retailers.
Joint work with Tarun Kushwaha (University of North Carolina) and Vishal Gaur (Cornell)
  
Session 5: Addressing Organizational Challenges in Healthcare
Friday, August 23, 10:30 – 11:50 - Cumnock 220
  
Causes of Operational Failures in Hospitals: A Qualitative Investigation
Anita Tucker - Associate Professor, Harvard Business School
 
Frontline staff members spend as much as 10% of their time working around operational failures, which are breakdowns in internal supply chains that prevent work from being completed due to missing materials, equipment, information, or human resources. However, scholars know little about the underlying causes, and therefore can offer limited guidance on reducing operational failures. To address this gap, we studied the sources of operational failures on two hospitals’ nursing units.  Our data came from in-depth observations with employees from four nursing units and the support departments providing materials needed for patient care.  We found that half (48%) of the 120 failures we observed were from violations of Spear and Bowen’s (1999) work design rules. However, one-third of the failures were from issues not explicitly discussed in Spear and Bowen’s framework.  These breakdowns reflected low levels of internal integration due to (1) a lack of connection between the work of supply departments and current patients’ needs; (2) limited knowledge transfer between interdependent departments; and (3) disconnected interdepartmental processes. Integration-related breakdowns occurred at the interfaces between nursing units and departments which provided essential materials, but whose work was not well integrated with the nursing units: pharmacy, laboratory, biomedical, sterile processing, and information technology.  The fact that failures stemmed from low levels of integration contrasted with employees’ perception that they were caused by others’ errors, dilatoriness, or incompetence.  Our study suggests that reducing failures in hospitals will require not only applying Spear and Bowen’s rules, but also an explicit focus on increasing internal integration of supply departments so that they are better coordinated and thus capable of meeting patients’ real time needs.
 
Cohort Turnover and Productivity: The July Phenomenon in Teaching Hospitals
Robert Huckman - Professor, Harvard Business School
 
We consider the impact of cohort turnover—the planned simultaneous exit of a large number of experienced employees and a similarly sized entry of new workers—on productivity in the context of teaching hospitals. Specifically, we examine the impact of the annual July turnover of residents in American teaching hospitals on levels of resource utilization and quality in teaching hospitals relative to a control group of non-teaching hospitals. We find that this annual cohort turnover results in increased resource utilization (i.e., higher length of hospital stay) for both minor and major teaching hospitals, and decreased quality (i.e., higher mortality rates) for major teaching hospitals. Specifically in major teaching hospitals, we find evidence of a gradual trend of decreasing performance that begins several months before the actual cohort turnover, which may result from a transition of responsibilities that occurs at major teaching hospitals in anticipation of the upcoming cohort turnover.
Joint work with Hummy Song (Harvard Business School) and Jason R. Barrow (Bain & Company)