Professor Anand Swaminathan

Professor Anand Swaminathan, a specialist in organizational theory and strategy, joined forces with Professor Arturs Kalnins of Cornell University’s School of Hotel Administration and Professor Will Mitchell of Duke University’s Fuqua School of Business to study how a small, multi-unit organization benefits from information gathered from other markets in which it competes. Their paper, “Turnover Events, Vicarious Information and the Reduced Likelihood of Outlet-Level Exit among Small Multi-unit Organizations,” was published in the January–February 2006 issue of the journal Organization Science. According to Swaminathan and his co-authors, it is commonly understood that organizations learn not only from their own mistakes, but also from the experiences of other organizations. The research team examined significant events that promoted the release of vicarious information such as turnover events, where a store or outlet changes ownership, or going-out-of-business events. They collected data on exits and entries for non-franchised pizza restaurants, drug stores and video rental outlets within each zip code in Texas over the period 1991–99. Their analysis shows that the likelihood of an outlet’s exit declines when there are many ownership transfers and exit-entry pairs in other markets where the owner also operates. The authors offer two reasons why ownership transfers are likely to release valuable information to competitors. First, ownership transfers allow competitors to relate differences in business strategies between new and previous owners, and competitors adapt their own strategies in response to the turnover event. Second, competitors glean information from newly hired employees previously employed by the outlet undergoing ownership change. Anecdotal data in the form of interviews with owners of pizza restaurants, drug stores and video outlets further support the researchers’ findings.

Swaminathan and his colleagues Professor Premkumar Devanbu and Professor Michael Gertz, both of the UC Davis Computer Science Department, were awarded a $125,000 National Science Foundation research grant for their paper, “Mining Problem-solving Behavior from Open Source Repositories.” Their interdisciplinary collaboration builds on existing work by explicitly connecting software engineering imperatives to the techniques of social science. Swaminathan also participated in the keynote panel on research programs in international business at the annual meeting of the European International Business Association in Oslo, Norway, in December.