Essays on Emerging Practitioner-Relevant Theories and Methods for the Valuation of Technology A dissertation submitted to: Kent State University Graduate School of Management in partial fulfillment of the requirements for the Doctor of Philosophy by: Suvankar Ghosh Date: June 20, 2009 Essays on Emerging Practitioner-Relevant Theories and Methods for the Valuation of Technology PhD Dissertation written by: Suvankar Ghosh Approved by: Doctoral Dissertation Committee ________________________________Dr. Marvin D. Troutt (Committee Chairman) ________________________________Dr. Alan Brandyberry ________________________________Dr. O. Felix Offodile ________________________________Dr. John H. Thornton, Jr. Graduate School of Management ________________________________Dr. Richard Kent, Graduate Faculty Representative ________________________________Doctoral Director, Graduate School of Management ________________________________Dean, Graduate School of Management ii Contents 1. Introduction .............................................................................................................................. 1 1.1 Dissertation Structure and Theme .................................................................................... 1 1.2 Synopses of Essays........................................................................................................... 5 1.2.1 A New Approach for Empirically Assessing Practitioner Relevance of Academic Research ................................................................................................................................... 5 1.2.2 An Adoption Decision Model for Emerging Capital Budgeting Methodologies .......... 6 1.2.3 Uncertainty and XML-Based Integration – A Real Options View................................ 7 1.3 Document Organization ................................................................................................... 8 2. A New Approach for Empirically Assessing Practitioner Relevance of Academic Research10 2.1 Introduction .................................................................................................................... 10 2.2 Towards a Testable Notion of Relevance ...................................................................... 13 2.3 Granger-Causality .......................................................................................................... 15 2.3.1 Applications of Granger-Causality ............................................................................ 17 2.3.2 Testing for Granger-Causality ................................................................................... 18 2.4 VAR Model of Academic and Practitioner Interest Processes ...................................... 19 2.5 Cointegration .................................................................................................................. 21 2.6 Testing the Research Relevance Model on Two Recent Topics .................................... 22 2.6.1 RO ............................................................................................................................... 22 2.6.2 EVA ............................................................................................................................. 24 2.7 Academic and Practitioner Interest Data ........................................................................ 25 2.8 Results ............................................................................................................................ 26 2.8.1. Cointegration and the Academic-Practitioner Interest Relationship ......................... 30 iii 2.9 Limitations ..................................................................................................................... 33 2.10 Conclusion ...................................................................................................................... 33 3. An Adoption Decision Model for Emerging Capital Budgeting Methodologies ................... 36 3.1 Introduction .................................................................................................................... 36 3.2 Background .................................................................................................................... 37 3.3 Methodology Adoption Decision Model ....................................................................... 43 3.4 Why Not Use the TAM? ................................................................................................ 46 3.5 Research Methodology ................................................................................................... 50 3.6 Results ............................................................................................................................ 53 3.6.1 Inter-rater Reliability ................................................................................................. 53 3.6.2 Analysis of Variance ................................................................................................... 54 3.6.3 Sensitivity Analysis ..................................................................................................... 57 3.7 Limitations ..................................................................................................................... 57 3.8 Validation of the MADM ............................................................................................... 60 3.8.1 Popperian Versus Lakatos Falsification in MADM Epistemology ............................ 61 3.8.2 MADM Implications as Falsification Targets ............................................................ 62 3.8.3 Sophisticated Falsification in Lakatos’ Epistemology ............................................... 64 3.8.4 Validity of the MADM Measurement Model............................................................... 66 3.9 Current Discourse on EVA and RO ............................................................................... 71 3.9.1 EVA ............................................................................................................................. 71 3.9.2 RO ............................................................................................................................... 74 3.10 Conclusion ...................................................................................................................... 77 3.9.1 Implications for Research ........................................................................................... 78 iv 3.9.2 Implications for Practice ............................................................................................ 79 4. Uncertainty and XML-Based Integration – A Real Options View ........................................ 82 4.1 Introduction .................................................................................................................... 82 4.2 Enterprise Integration - XML to the Rescue .................................................................. 85 4.3 Strategic NPV and RO ................................................................................................... 89 4.4 Research Methodology ................................................................................................... 90 4.5 Use Cases of XML-Based Enterprise Integration Technology ...................................... 94 4.6 An Uncertainty Model for Enterprise Integration .......................................................... 96 4.6.1 Technical Architecture ............................................................................................. 100 4.6.2 Market ....................................................................................................................... 101 4.6.3 Standards .................................................................................................................. 105 4.6.4 Performance ............................................................................................................. 107 4.6.5 The Use Case-Uncertainty Mapping Matrix ............................................................ 108 4.7 RO Decision-Making Framework for EI Investments ................................................. 109 4.8 Conclusion .................................................................................................................... 117 5. Conclusion ............................................................................................................................ 121 5.1 Future Research ............................................................................................................ 126 5.2 Testing the MADM Against Alternative Theories ....................................................... 126 5.3 General Methodology for Developing an RO-based Decision-Making Framework .. 129 5.4 Fit with Research Area ................................................................................................. 131 Bibliography ............................................................................................................................... 133 Appendix A.1 Overview of EVA and RO .............................................................................. 162 A.1.1 EVA .............................................................................................................................. 162 v A.1.2 RO ................................................................................................................................ 163 Appendix A.2 Academic and Practitioner Interest Levels in EVA and RO