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Dissertation/Thesis Abstract

Explaining the Exceptions: Theory and Evidence on the Economic Behavior of IT Professionals
by MacCrory, Francis E, III, Ph.D., University of California, Irvine, 2012, 134; 3512706
Abstract (Summary)

Virtually all firms entrust critical tasks to the IT professionals whom they employ. The execution of these tasks depends upon technical skills and economic incentives, and this dissertation focuses on those incentives. In this dissertation I develop analytical models that take into account team composition, managerial oversight, promotion opportunities and offshoring, and those models' predictions about withdrawal behaviors such as shirking, absenteeism, and turnover are confirmed by empirical tests using a detailed dataset of 5704 IT professionals over a five year period. I report four principle findings. First, size is not a good proxy for the seriousness of moral hazard in a multifunction team, but my parsimonious model captures the incentive effects within and between functions to explain short-term incentives. Substitutability within a function decreases individual effort as the group grows larger, but the complementarity between functions mitigates this effect. Unfortunately multiple functions also dilute the manager's monitoring effort, so firms must balance these forces to find an optimum team structure. Second, the chronic high turnover of IT professionals can be explained by combining tournament theory and the unfolding theory of turnover. I show that tournaments induce effort but also induce inefficient levels of turnover, and that the turnover effect decreases as the stakes are lowered at each step of the promotion ladder. Since certain IT professions are hypersensitive to this turnover effect, even small changes can have economically significant impacts. Third, many firms lavishing expensive perks on their IT employees to improve retention, but this leads inexorably to bidding up of compensation across all firms without improving retention in the long term. My model determines the appropriate level of perks that will improve retention without runaway bidding. Fourth, I demonstrate that offshoring exerts a distinct and separate effect on turnover. Specifically, offshoring changes a job in a way very similar to adding boundary-spanning activities, and boundary-spanning activities are known to cause a number of problems including increased turnover. Recognizing the boundary-spanning nature of offshoring promises to augment work on virtual teams toward discovering ways to mitigate the negative aspects of offshoring.

Indexing (document details)
Advisor: Kraemer, Kenneth L.
Commitee: Choudhary, Vidyanand, Gurbaxani, Vijay
School: University of California, Irvine
Department: Management - Ph.D.
School Location: United States -- California
Source: DAI-A 73/10(E), Dissertation Abstracts International
Subjects: Management, Information Technology
Keywords: Economics of information systems, IT personnel, Information technology, Management information systems, Moral hazard, Turnover
Publication Number: 3512706
ISBN: 978-1-267-41939-2
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