Ranjani Krishnan - Academia.edu (original) (raw)

Papers by Ranjani Krishnan

Academy of Management Proceedings

We examine the effect of board gender diversity on innovation outcomes. Using upper-echelons and ... more We examine the effect of board gender diversity on innovation outcomes. Using upper-echelons and construal level theory, we argue that female representation on corporate boards increases the divers...

Contemporary Accounting Research

Journal of Medical Internet Research

Background Popular web-based portals provide free and convenient access to user-generated hospita... more Background Popular web-based portals provide free and convenient access to user-generated hospital quality reviews. The Centers for Medicare & Medicaid Services (CMS) also publishes Hospital Compare Star Ratings (HCSR), a comprehensive expert rating of US hospital quality that aggregates multiple measures of quality. CMS revised the HCSR methods in 2021. It is important to analyze the degree to which web-based ratings reflect expert measures of hospital quality because easily accessible, crowdsourced hospital ratings influence consumers’ hospital choices. Objective This study aims to assess the association between web-based, Google hospital quality ratings that reflect the opinions of the crowd and HCSR representing the wisdom of the experts, as well as the changes in these associations following the 2021 revision of the CMS rating system. Methods We extracted Google star ratings using the Application Programming Interface in June 2020. The HCSR data of April 2020 (before the revisi...

We examine factors that influence employee learning. Learning curve theory predicts that as emplo... more We examine factors that influence employee learning. Learning curve theory predicts that as employees learn on the job, costs are a function of accumulated volume, not just output rate. Thus, the short-run output decision becomes an investment decision with a longer horizon in the presence of learning curves. Using data from clinical laboratories, we find theory-consistent evidence of autonomous learning by technical and supervisory labor, which manifests as a nonlinear reduction of labor hours and labor cost when cumulative volume increases. Our results indicate that clinical labs engage in a quality-cost tradeoff for technical labor. Labs belonging to lower quality hospitals exhibit greater cost reduction through learning relative to their higher quality counterparts. We find that for-profit labs have less favorable learning curves for technical labor. Labs belonging to hospitals that have higher technical efficiency have more favorable learning curves. Our study contributes to the understanding of how employee learning can influence cost behavior in various types of organizations and helps to unpack the microfoundations of cost management.

Special Issue This research examines the impacts of the assimilation and use of IT on the financi... more Special Issue This research examines the impacts of the assimilation and use of IT on the financial performance of hospitals. We identify two dimensions of IT assimilation and use. They are the IT applications architecture spread, which is the adoption of a broad array of IT solutions, and IT applications architecture longevity, which is the length of experience with use of specific IT solutions. We examine the extent to which these dimensions of assimilation within the business and clinical work processes impact hospital performance. Compared with the effects of IT applications architecture spread, we find that the IT applications architecture longevity has a more significant effect on financial performance. In addition, the effects of assimilation manifest differently across the business and clinical process domains. Our results enhance understanding about the manner in which the assimilation and use of IT contributes to the financial performance of hospitals.

Journal of Accounting and Economics, 2021

We examine drivers and consequences of U.S. Department of Justice (DOJ) oversight of whistleblowe... more We examine drivers and consequences of U.S. Department of Justice (DOJ) oversight of whistleblower cases of corporate fraud against the government. We find that the DOJ is more likely to intervene in and conduct longer investigations of cases that have a higher chance of victory and yield greater monetary proceeds, indicating that DOJ enforcement is influenced by its performance measures. DOJ intervention also affects the firmand aggregate-level fraud environment. Firms subject to DOJ intervention improve their employee relations, internal controls, and board independence, and experience lower future whistleblowing risk. Whistleblowers avoid courts and agencies with low DOJ intervention rates. In contrast, we do not find that cases pursued by whistleblowers alone affect firms' or whistleblowers' behavior, suggesting that public enforcement through DOJ intervention has a greater deterrent effect on fraud than private enforcement by whistleblowers acting alone.

This study examines performance effects from the use of relative performance evaluation (RPE) as ... more This study examines performance effects from the use of relative performance evaluation (RPE) as a sorting mechanism for promotion decisions within the organizational labor market. Organizations routinely use RPE to reduce common uncertainty and increase contracting efficiency. However, owing to the discrete and persistent increase in compensation that occurs when an individual is promoted, incentive effects of RPE are likely to be most pronounced when RPE is used as the basis for promotion decisions. We use proprietary archival and survey data from a large internal audit organization and find that RPE increases performance to a greater extent for junior auditors who have higher opportunities for promotion relative to senior auditors who have fewer opportunities for promotion. Indeed, we find that RPE is negatively associated with performance for senior auditors. These results suggest that RPE is not only less effective at higher levels of the organization, but may also be dysfuncti...

Organizations use systems of controls to encourage goal congruent employee behavior. Some control... more Organizations use systems of controls to encourage goal congruent employee behavior. Some control instruments within the system (e.g., cultural controls) guide employees and align their behavioral choices with organizational values, while other instruments (e.g., budgetary controls) facilitate resource allocation in the presence of asymmetric information. We explore how a system of controls comprising of cultural controls (i.e., mission statements) and budgetary controls influence budgetary misreporting. Experimental results indicate that a mission statement that emphasizes integrity results in lower misreporting when combined with budgetary controls that assume self-interested managers relative to its combination with budgetary controls that assume honest managers. Mission statements that emphasize financial performance do not reduce misreporting when combined with either type of budgetary controls. Organizational stewardship partially mediates the effect of systems of controls on ...

BACKGROUND Popular online portals provide free and convenient access to user-generated quality re... more BACKGROUND Popular online portals provide free and convenient access to user-generated quality reviews. Centers for Medicare and Medicaid Services (CMS) also provide patients with Hospital Compare Star Ratings (HCSR), a single public measure of hospital quality aggregating multiple quality dimensions. Consumers often use crowdsourced hospital ratings on platforms such as Google to select hospitals, but it is unknown if these ratings reflect a comprehensive measure of clinical quality. OBJECTIVE We analyze if Google online quality ratings, which reflect the wisdom of the crowd, are associated with HCSR, which reflect the wisdom of the experts. CMS revised the methodology of assigning star ratings to hospitals. Therefore, we analyze these associations before and after the 2021 revisions of the CMS rating system. METHODS We extracted Google ratings using Application Programming Interface (API) in June 2020. The HCSR data of April 2020 (before the revision of HCSR methodology) and April...

International Journal of Health Economics and Management, 2020

Mandatory measurement and disclosure of outcome measures are commonly used policy tools in health... more Mandatory measurement and disclosure of outcome measures are commonly used policy tools in healthcare. The effectiveness of such disclosures relies on the extent to which the new information produced by the mandatory system is internalized by the healthcare organization and influences its operations and decision-making processes. We use panel data from the Japanese National Hospital Organization to analyze performance improvements following regulation mandating standardized measurement and peer disclosure of patient satisfaction performance. Drawing on value of information theory, we document the absolute value and the benchmarking value of new information for future performance. Controlling for ceiling effects in the opportunities for improvement, we find that the new patient satisfaction measurement system introduced positive, significant, and persistent mean shifts in performance (absolute value of information) with larger improvements for poorly performing hospitals (benchmarking value of information). Our setting allows us to explore these effects in the absence of confounding factors such as incentive compensation or demand pressures. The largest positive effects occur in the initial period, and improvements diminish over time, especially for hospitals with poorer baseline performance. Our study provides empirical evidence that disclosure of patient satisfaction performance information has value to hospital decision makers.

Management Science, 2020

Interfirm contracts are plagued by opportunism arising from exchange hazards that increase the se... more Interfirm contracts are plagued by opportunism arising from exchange hazards that increase the seller’s gains from holdup in fixed price contracts. These exchange hazards are higher when the seller can engage in unverifiable deliberate obfuscation. Although cost-plus contracts reduce holdup losses, they suffer from cost inefficiency. Past research has underscored the importance of trust as a control instrument to mitigate losses from exchange hazards, especially social relational trust that develops from past experiences. However, trust can also be calculative when it develops from the expectation of future economic gains to the buyer-seller dyad. We identify two dyadic mechanisms that generate calculative trust and curtail the likelihood of cost-inefficient behavior in cost-plus contracts. These mechanisms include future potential and bilateral reputation capital for cost containment. Analysis using probit estimations on 149 information technology outsourcing contracts for the peri...

SSRN Electronic Journal, 2014

Contemporary Accounting Research, 2019

In strategic outsourcing contracts, a substantial portion of implementation occurs at the client'... more In strategic outsourcing contracts, a substantial portion of implementation occurs at the client's premises and requires integration of effort between the vendor and the client. Compensation design in such contracts involves trade-offs between the higher (lower) incentive properties of fixed-price (cost-plus) contracts and their higher (lower) ex ante contracting and ex post adaptation costs. Uncertainty influences these trade-offs and affects compensation design. We explore the compensation implications of two types of uncertainty-volatility and ambiguity-which are reflected in the client's accounting measures. Volatility reflects the unpredictability of changes in the future environment, which makes it difficult to contractually specify future contingencies. Ambiguity reflects lack of consensus about the nature, drivers, and value effects of uncertainty, which makes it difficult to contractually specify responses to contingencies if and when they occur. Volatility increases the likelihood of ex post adaptation costs while ambiguity increases ex ante contracting costs; therefore, volatility and ambiguity decrease the attractiveness of FP contracts. We use accounting and market measures to calibrate volatility and ambiguity and examine their implications for compensation design and ex post renegotiation. Analysis of archival data for 455 strategic outsourcing contracts valued over $15 million indicates that volatility and ambiguity influence contract compensation design and renegotiation likelihood. These results hold even after controlling for asset specificity, task complexity, and relational factors. We conclude that accounting measures can provide signals of volatility and ambiguity and thereby influence compensation design in strategic inter-firm contracts.

Journal of the Association for Information Systems, 2011

This research examines the impacts of the assimilation and use of IT on the financial performance... more This research examines the impacts of the assimilation and use of IT on the financial performance of hospitals. We identify two dimensions of IT assimilation and use. They are the IT applications architecture spread, which is the adoption of a broad array of IT solutions, and IT applications architecture longevity, which is the length of experience with use of specific IT solutions. We examine the extent to which these dimensions of assimilation within the business and clinical work processes impact hospital performance. Compared with the effects of IT applications architecture spread, we find that the IT applications architecture longevity has a more significant effect on financial performance. In addition, the effects of assimilation manifest differently across the business and clinical process domains. Our results enhance understanding about the manner in which the assimilation and use of IT contributes to the financial performance of hospitals.

Academy of Management Journal, 2016

Organizations often respond to institutional pressures by symbolically adopting policies and proc... more Organizations often respond to institutional pressures by symbolically adopting policies and procedures but decoupling them from actual practice. Literature has examined why organizations decouple from regulatory pressures. In this study, we argue that decoupling occurs within regulatory agencies and results from a combination of conflicting institutional pressures, complex goals, and internal fragmentation. Further, regulatory decoupling is selective, i.e., regulators fail to adequately enforce standards only for one set of organizations. Regulated organizations that benefit from selective regulatory decoupling use nonmarket strategies to maintain their favorable regulatory status and in the process selectively decouple their norms in one organizational activity but not others. As an empirical context, we use the hospital industry where regulators have to balance conflicting pressures to be tough on fraud, while maintaining the community's access to essential but unprofitable services such as charity care and medical education. In response, hospital regulators selectively decouple and exhibit leniency in enforcement of mispricing practices towards beneficent hospitals, defined as hospitals that provide more charity care and medical education. In turn, beneficent hospitals selectively decouple their service and profit goals by providing unprofitable services to uninsured patients, while mispricing insured patients to earn higher reimbursements.

The Japanese Accounting Review, 2016

We distinguish ambiguous common uncertainty (with unknown probability distribution) from risky co... more We distinguish ambiguous common uncertainty (with unknown probability distribution) from risky common uncertainty (with known probability distribution) and examine how employee preference for relative performance contracts differs between the two conditions. Using economics and psychology theory in decision making under uncertainty, we hypothesize that (i) preference for relative performance contracts is low (high) when common uncertainty is ambiguous (risky); and (ii) confidence mediates the relation between ambiguity and preference for relative performance contracts. Results from a controlled laboratory experiment support these predictions. A follow-up experiment provides evidence that the direct effect of ambiguity and the mediating effect of confidence disappear if the contract is based on independent performance measures. Our study contributes to the literature on performance measurement, employee contract preference, and decision making under uncertainty.

International Encyclopedia of Public Health, 2017

This article is an updated version of the previous edition article by Xingzhu Liu, Anne Mills, vo... more This article is an updated version of the previous edition article by Xingzhu Liu, Anne Mills, volume 2, pp. 276–281, © 2008, Elsevier Inc.

SSRN Electronic Journal, 2015

We posit that nonprofits that provide a greater supply of unprofitable services (beneficent nonpr... more We posit that nonprofits that provide a greater supply of unprofitable services (beneficent nonprofits) face lenient regulatory enforcement for mispricing in price-regulated markets. Consequently, beneficent nonprofits exploit such regulatory leniency and exhibit higher mispricing. Drawing on organizational legitimacy theory, we argue that both regulators and beneficent nonprofits seek to protect their legitimacy with stakeholders, including those who demand access to unprofitable services. Using data from hospitals, we examine mispricing via "upcoding", which involves misclassifying ailment severity. Archival analysis indicates less stringent regulatory enforcement of upcoding for beneficent nonprofit hospitals, defined as hospitals that provide higher charity care and medical education. After observing regulator leniency, beneficent hospitals demonstrate higher upcoding. Our results suggest that lenient enforcement assists beneficent nonprofits to obtain higher revenues in price-regulated markets.

Lecture Notes in Business Information Processing, 2015

An underlying assumption in the literature on inter-firm contracting has been that relational gov... more An underlying assumption in the literature on inter-firm contracting has been that relational governance is better than formal controls at mitigating contractual hazards. If formal controls are at best inadequate and at worst useless, then it are hard to reconcile the practical observation that most firms continue to write detailed contracts that include a rich set of formal controls.

Social Science Research Network, Mar 7, 2014

ABSTRACT IT outsourcing contracts involve high transaction costs due to their inherent complexity... more ABSTRACT IT outsourcing contracts involve high transaction costs due to their inherent complexity and asset specificity. Repeated interactions between transacting parties facilitate cooperative relationships that could provide a mechanism to implement non-contractible outcomes. Using a novel data set on information technology outsourcing contracts, we examine the tradeoff between the cost containment incentives of fixed price contracts and lower renegotiation costs of cost-plus contracts, and how introducing relationships affects the design of formal contracts. We find that (i) complex projects are positively associated with the use cost-plus contracts; (ii) a service provider with high reputation capital in fair bargaining (cost-containment) is more likely to be awarded a fixed-price (cost-plus) contract; (iii) parties with potential future or contemporaneous businesses are more likely to use cost-plus contracts; (iv) cost-plus contracts appear to better facilitate self-enforcing of relational contracts. These pieces of evidence from IT outsourcing demonstrate the impact of relationships on the design of procurement contracts.