Channel Expansion Theory as an Online Biological Extension of Urges

Technology has huge impacts on our daily life and has encouraged new ways of communicating. Such technology is the natural extension of our biological capacities within the environment. Whether we are discussing education, government, social relationships, business development or international relations this technology now dominates our evolutionary developmental process as a powerful new tool. As this technological ability grows in society people will naturally start using this technology in new ways. According to channel expansion theory people will communicate using these new methodologies in order to expand their capabilities of reaching out in the environment.  This reaching out creates new influences on human behaviors through the process of imitation.

Most of human behavior is not within our awareness and we have a hard time reflecting on such behavior. Such behavior is below our level of conscious understandings (Barkow et. al., 1992). This means that most people act in manners and patterns without full awareness that such behavior is driven by a need to achieve certain results in the environment. Each person is driven by biological urges that manifest itself in the virtual world.

Our social behavior is learned by copying each other even when we are not aware we are doing so. Memes, or cultural transmission, are mimicked until they spread to a larger group of people (Henrich, 2004). This behavior grows and develops aspects of society through various communication mediums. In other words, technology creates expanding networks of people that form virtual communities which continue to collect new members.

Virtual communities use these same methodologies when spreading information to be emulated to other group members. Porra and Parks (2006) have used a broad model of sustainable virtual communities based on the properties of natural animal colonies. That such groups take on the form of animal colonies much like people with physical interaction taking on societal norms. The same patterns in natural are also seen online when the virtual world is an extension of the natural order. 

Such groups develop and grow in manners that help them overcome environmental challenges. Virtual groups progress in manners that copy the underlying logic of biological evolution (McElreath and Boyd, 2007). Therefore, whether groups are in virtual society or in physical society, they grow and evolve following the laws of nature. These same entities also communicate with each other, create societal norms, and adjust to new influences.

In order to foster this copying activity and societal structure the human mind has developed new methods to transferring information in human-to-human interactions. Such development is from the biological evolutionary push for survival (Kock, 2004). Even with such a push, it is possible that these same mechanisms are used in the development of virtual understandings inherent in digital information transference. In other words, our previous communication methods have adapted to an online environment.

According to channel expansion theory as people gain knowledge about particular technologies they are more able to use them for stronger communication tactics. As users become more accustomed to specific forms of communication like email, chat, video conference, etc… they also develop better methods of creating meta-language (embedded language) to communicate and receive subtle meanings (Carlson and Zmud, 1999). Thus new forms of communication methods result from the use of virtual technology that expand communicative effectiveness.

 This virtual technology has made its way into the school systems, our social affairs, and our businesses. As people become more accustomed to technology, they begin to use such tools in more efficient methods that expand the bandwidth of such mediums (Carlson & Zmud, 1994). Through this creation of expanding communication networks, higher levels of information are transferred to maintain and develop group members to certain social structures.

In modern times it is possible to develop entire societies in the virtual world that have certain orders maintained by group norms. These societies develop their own way of communicating that perpetuates their methodologies and lifestyles. Virtual colleges are testimony to the creation of rich information used in new and unique manners with multiple forms of media that can create higher forms of learning. Such communication tools become more effective over time developing new methods of satisfying biological needs and maintaining social rules that extend human capacities. As nations move into the virtual realms they may find that their societal influence grows by using existing communication channels in new ways that develop higher forms of communication methodology. The more people who become accustomed to this technology the more likely they will be attached to certain societies that resonate with their personal belief systems.

Barkow, J. H., Cosmides, L., and Tooby, J. (eds.). 1992. TheAdapted Mind: Evolutionary Psychology and the Generation of Culture, New York: Oxford University Press.

Carlson, J. & Zmund, R. (1994). Channel expansion theory: a dynamic view of medial and information richness. Academy of management best papers proceedings, pp. 280-284.

Carlson, J. and Zmud, R. (1999) Channel Expansion Theory and the Experiential Nature of Media Richness Perceptions. Academy of Management Journal, 42 (2) pp. 153-170.

Henrich, J. (2004). “Cultural Group Selection, Coevolutionary Processes and Large-Scale Cooperation,” Journal of Economic Behavior and Organization (53:1), pp. 3-35.

Kock, N. (2004). “The Psychobiological Model: Towards a New Theory of Computer-Mediated Communication Based on Darwinian Evolution,” Organization Science (15:3), pp. 327-348.

Porra, J., and Parks, M. S. (2006). “Sustainable Virtual Communities: Suggestions from the Colonial Model,” Information Systems and e-Business Management (4:4), pp. 309-341.

McElreath, R., and Boyd, R. (2007). Mathematical Models of Social Evolution: A Guide for the Perplexed, Chicago, IL: The University of Chicago Press.

The Development of Products in the Global Internet Marketplace

Service implementation and management requires a keen understanding of the organization and the process of development. Executives that understand these steps are likely to realize higher levels of success when designing new services and creating new revenue streams. Ignoring any aspect of the process could result in poor design, poor implementation, ineffective customer interface or poor cultural fit that loses capital and investments.

Ideas for service innovation can come from a variety of sources ranging from individual employees to customer feedback. When such ideas are brought forward they are often screened to ensure feasibility and fit with the organization’s strategic plan. As a basic process the organization develops the concepts, analyzes its utility, designs the product and then launches it into the market (Johnson, et. al., 2000). The process is cyclical in that feedback from customers and improvements in design encourages produce relevancy. 

No matter how effective innovation is it must have some value to customers. This value can be real or imaginary in terms of a cost or social benefit. Since these values are often dependent on individual perception some organizations consider using a more systematic approach to possible revenue streams.

The value of the product to the customer is one of the most important ways of determining whether or not the successes of such innovations are likely. Some organizations use an equation to determine the relative value of the product or service. An analysis helps to maintain a level of objectivity when making important strategic offerings. 

Value = Results produced for the customer + process quality/price to customer + costs of acquiring the service. 

In such an equation the results produced are based on the value to the customer, the process quality is the value of the delivery system, price to the customer is its monetary cost, and costs of acquiring the service is the amount of effort in obtaining the product. Each of these factors is analyzed in terms of their quantitative value in order to determine the market value of the product or service. 

Organizations that have moved online and capitalized in the virtual e-commerce market have created dominance in commercial selling and activity. With a proper customer interface and a strong distribution network such organizations allow customers to complete much of their shopping and effort themselves. More importantly the amount of actual customer cost in terms of effort has been reduced significantly with improved search engine performance. 

Technology has also been beneficial in developing efficient service quality by bridging the virtual and physical worlds. Ensuring that the entire process of purchasing online to delivery at the door is efficient raises the perceived value of the service. The easier the process the more satisfaction created. Some organizations might use the SEVQUAL approach which includes analysis of reliability, responsiveness, assurance, empathy and tangibles (Fitzscommon & Fitzscommon, 2011). 

The nature of the Internet also creates world integration of services, ideas, and interaction. Despite this growing trend specific cultures still have their own particular customs. Organizations that bridge these cultural gaps to sell products seek ways of understanding how to not only operate businesses but how to manage the labor thus associated. Gert Hofstead (n.d.) conducted a survey that assessed the work-related values in fifty countries that used the following five dimensions of Power Distance (equality), Individualism (individual treatment), Masculinity (traditional work roles), Uncertainty Avoidance (ambiguity tolerance) and Long-Term Orientation (time commitment). Each of these aspects shed lights of how local customers impact business imperatives.

The success of service innovation and development rests on understanding how new developments are processed within organizations, assessed for value, implemented in the market, and relate to specific cultural needs of the target customers. Understanding this chain of development helps to create executive awareness of the overall wider steps to successful service development. Failure is more likely to occur when steps are either skipped or discounted in development. 

Johnson, S., Menor, L. Roth, A. & Chase, R. A critical evaluation of the new service development process: Integrating service innovation and service design. In New Service Development, eds.

Fitzsimmons and Fitzsimmons. Thousand Oaks, Calif.: Sage Publications, 2000, pp.1-32.

Fitzsimmons, J. & Fitzsimmons, M. (2011). Service Management: Operations, Strategy, Information Technology (Seventh Edition). NY: McGraw-Hill. 

Hofstead, G. (n.d.) Cultural Insights. Retrieved April 2^nd, 2013 from http://geert-hofstede.com/

Stakeholder Orientation and Stakeholder Marketing

Stakeholder Orientation

Ferrell, Fraedrich and Ferrell (2013) stated that, “The degree to which a firm understands and addresses stakeholder demands can be referred to as stakeholder orientation” (p. 35).  According to Duesing (2009), one of the primary management theories is the Stakeholder Orientation (SO).  

  Ansoff (1965) initially discussed SO in terms of “balancing the conflicting claims of the various ‘stakeholders’ in the firm: managers, workers, stockholders, suppliers, vendors. The firm has a responsibility to all of these and must configure its objectives so as to give each a measure of satisfaction” as cited in Duesing.

Multiple authors have added to this definition to include the community and environment (Berman et al., 1999) to competitors and other industries (Greenley & Foxall, 1997) as cited in Duesing. Duesing (2009) posits that literature has previously stated that SO positively affects organizational performance.  The results of Duesing’s study showed that of all the stakeholders the ones with the strongest affect on organizational performance were employees and customers.

Stakeholder Marketing

Stakeholder marketing takes into consideration that the market is more than a unique niche.  The customers are not standalone islands, but are vastly interconnected with government, other vendors, their community, and all of these affect the decisions that the consumers will make (Hosfeld, 2013).

Stakeholder marketing is an important part of embracing a systems perspective because it engages with the marketplace as such a dynamic system. It can also reflect the intention to create social good, depending on the degree of mutuality to which the company aspires (Hosfeld, 2013).

In this global and innovative marketplace, we must consider all ethical factors in place , when establishing a stakeholder marketing strategy.  Listed below in Table 1 are Forbe’s Top Ten Corporate Citizens that have the highest standards of ethical behavior when considering all of their stakeholders.

Table 1

Forbe’s Top Ten Corporate Citizens

Number	Organization
1	Bristol – Myers Squibb
2	IBM
3	Microsoft
4	Intel
5	Johnson Controls
6	Accenture
7	Spectra Energy
8	Campbell’s
9	Nike
10	Freeport-McMoran Copper & Gold

Author: Dr. Andree Swanson

References

Duesing, R. (2009). Stakeholder orientation and its impact on performance in small businesses. Doctoral dissertation. Retrieved from http://udini.proquest.com/view/stakeholder-orientation-and-its-pqid:1876290581/

Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2013). Business ethics & social responsibility. [OMM640 Custom edition] Mason, OH: Cengage Learning .

Hosfeld, K. (2013). Stakeholder marketing: Building trust and loyalty in cynical market. Hosfeld and Associates. Retrieved from http://blog.hosfeld.com/trust/stakeholder-marketingbuilding-trust-and-loyalty-in-a-cynical-market/

Does Negotiating Pay with Employees Lead to Higher Performance and Profits?

Employers seek to create higher levels of employee performance as well as high firm profits. Standard employment contracts with predefined pay may not be offering an appropriate level of motivation for employees. Research conducted by Kuang and Moser may provide insight into how such negotiable contracts would work in the marketplace.

Participative decision-making can improve firm performance in two ways (Zwick 2004) which includes information transference and employee involvement. In the first case, the transference of information creates a more efficient organization while employee involvement improves overall satisfaction with the organization. Both help tie the individual to the organizations success and mission. 

Employees need accurate information in order to make choices within the workplace. The information disseminates useful data to employees (Freeman & Lazear 1995) that encourages effective organizational operations. The more useful information employees have the more efficient their daily activities and choices become which in turn raises the potential profits of the firm. Waste can be seen as a byproduct of poor choices.

Such participative management also produces a psychological effect on employees that raises their satisfaction and morale (Covaleski et al. 2003). With participative management employees may feel as though they are part of the organization and will take greater care to ensure its success. Through such activities, employees change from being the actors to the authors of their employment status.

Wages are a central factor in gainful employment and often determine the nature of employee-employer relationships. Wage negotiation is part of the process of participative management (Locke & Schweiger, 1979). Employees who have a level of control over their wages are likely to work smarter and harder in order to raise their market value.

Research conducted by Kuang and Moser (2011) studied the psychological effect of a model that offers a contract, allows the employee to counteroffer and then provides a final offer the employee can either accept or reject. It is believed that such offers raise the employee’s aspiration levels which will encourage them to either put forth more effort or move to another organization. A total of 80 MBAs with approximately 4.5 years of full-time experience were included.

Results:

-There were differences in firm profit and employee effort.

-When there is participative management and adequate employee information there is a reciprocal between employee effort and firm profit.

-If the firm affords the ability for employees to negotiate and raise their aspiration levels without adequate increases in pay once that level has been achieved a negative performance result may occur.

-Employees prefer no negotiation if they do not feel the relationship with their employer is equitable.

-Potential negative effects of mismanaged negotiation processes are more damaging than the positive effects of a well managed negotiation processes.

Analysis:

Employees, like firms, seek to create higher levels of pay and resources. Negotiating with employees can raise their level of performance as they become attracted to and seek higher levels of needs attainment. However, a poorly designed approach to negotiating with employees can damage and limit future performance. Successful negotiation provides a truer economic relationship between employer and employee when compared to contracts with defined pay as seen in unionized environments. Yet the perceived equity of those contracts and improved performance by employees relies on trust, participatory management, and adequate information. Equitable relationships based on trust result when employees have an incentive to raise their market value and employers reward employees for their increased value. It is important to note that if the negotiation process is not seen as equitable employee prefer a defined contract without negotiation.

Covaleski, M. . Evans, J. Luft, J. and Shields, M. (2003). Budgeting research: Three

theoretical perspectives and criteria for selective integration. Journal of Management Accounting

Research 15 (1): 3–49.

Freeman, R. & Lazear, E. (1995). An economic analysis of works councils. In Work councils,

ed. J. Rogers and W. Streeck, 27–52. Chicago: The University of Chicago Press.

Kuang, X. & Moser, D. (2011). Wage negotiation, employee effort, and firm profit under output-based versus fixed-wage incentive contracts. Contemporary Accounting Research, 28 (2). 

Locke, E. and Schweiger, D. (1979) Participation in decision-making: One more look. In

Research in organizational behavior, vol. 1, ed. B. M. Staw, 265–339. Greenwich, CT: JAI Press.

Zwick, T. (2004). Employee participation and productivity. Labor Economics 11 (6): 715–40.