Paper Number
1342
Paper Type
Completed
Description
In this paper, we explore the spillover effect of customer firms’ data breaches on their upstream supplier firms’ cost management strategies, proxied by cost stickiness. Our primary analyses suggest that data breaches suffered by customer firms are associated with a decrease in cost stickiness among supplier firms. Furthermore, the reductions in supplier cost stickiness are stronger if suppliers are managed by CEOs from national cultural groups with high uncertainty avoidance, low long-term orientations, and/or low individualism. In sum, the findings contribute to both Information Systems (IS) and Operations Management (OM) disciplines in terms of data breach, cost management strategy, and the role of national culture in OM. In particular, the findings can facilitate the management and regulation of data breaches for managers and regulators.
Recommended Citation
Yang, Xu; Liang, Peng; Hu, Nan; and Xue, Fujing, "Customer Cybersecurity and Supplier Cost Management Strategy" (2023). ICIS 2023 Proceedings. 9.
https://aisel.aisnet.org/icis2023/cyber_security/cyber_security/9
Customer Cybersecurity and Supplier Cost Management Strategy
In this paper, we explore the spillover effect of customer firms’ data breaches on their upstream supplier firms’ cost management strategies, proxied by cost stickiness. Our primary analyses suggest that data breaches suffered by customer firms are associated with a decrease in cost stickiness among supplier firms. Furthermore, the reductions in supplier cost stickiness are stronger if suppliers are managed by CEOs from national cultural groups with high uncertainty avoidance, low long-term orientations, and/or low individualism. In sum, the findings contribute to both Information Systems (IS) and Operations Management (OM) disciplines in terms of data breach, cost management strategy, and the role of national culture in OM. In particular, the findings can facilitate the management and regulation of data breaches for managers and regulators.
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