Technology standards and performance: the impact of social network service integration and open technology standards

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Frutiger, Michael
Overby, Eric
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For at least hundreds of years, if not longer, industries have been regularly transformed by the adoption of standards. Early examples from the early nineteenth century include the standardization of railroad track gauges and the introduction of interchangeable parts in the production of munitions. With the advent of the modern technology era, the introduction of standards has continued to transform industries that are now information technology driven. However, despite the broad consequences the introduction of standards presents, there remains a limited understanding of them. In this work we begin to build upon our understanding of the impact of standards by conducting a study on each of two distinct industries that have significant implications for society. The first industry considered is online services, focusing on an increasingly dominant subset that contains online communities. This industry is being transformed by the introduction of de facto standards for user profile management through social network service integration. The second industry studied is the defense avionics industry. This industry is positioned to potentially be transformed by the introduction of an open technology standard for software development. In the first study we investigate the impact of an increasingly common but understudied design option available to online communities: whether to integrate with a social network platform such as Facebook or Google+. Social network platform integration may provide several benefits to an online community, including creating more social interaction opportunities for members and helping members share personal information with each other to facilitate the creation of social bonds. Theory suggests that both of these factors (opportunities for interaction and disclosure of personal data) enhance the success of bond-based online communities, i.e., those in which member attachment to the community is driven by social bonds with other members. However, some elements of the theory have not been tested, and the theory does not consider the possibility that interaction opportunities and the disclosure of personal information might harm the online community by creating information privacy concerns among users. To address this gap, we tested the effect of implementing the “Login with Facebook” feature on new member registration and member social bond formation in an online virtual world community. Using a randomized field experiment as well as archival data analysis, we found that Facebook integration led to lower registration and lower social bond formation. I.e., it had a consistently negative effect on the online community. In addition to contributing to theory about the design of online communities, our results are also of practical interest to managers of online communities who have implemented or are planning to implement social network platform integration as well as to social network platforms who would like for their integration services to be more widely adopted. In the second study we examine the impact of introducing an open technology standard to the U.S. Defense Avionics industry. U.S. Defense Avionics is a multi-billion dollar industry featuring a monopoly buyer and pseudo-monopoly sellers, and its interplay of regulation and competition have traditionally favored secrecy and proprietary design as companies vie for huge multi-year contracts in a feast or famine market. Recognizing this, the U.S. government launched an initiative to develop an open technology standard jointly with industry, with the intention of using these standards to leverage the anticipated competition and efficiency benefits. Using a combination of interviews and a Delphi study, we examine the impact of this standard on software project effort across key industry firm archetypes. We find that experts anticipate a significant premium in the short term that transitions to cost reduction in the long term, with these expectations varying by firm type. This work contributes to the literature on open standards and learning by validating and quantifying the effect, and provides unique insights into U.S. Defense Avionics industry. This study also informs both expert and industry expectations as well as provides a best estimate of the actual impacts of adopting the standard.
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