Team Design and its Implications for Competition and Disclosure

By Anil Arya, Ram Ramanan
Production and Operations Management

Citation

Arya, Anil., Ramanan, Ram. (2025). Team Design and its Implications for Competition and Disclosure Production and Operations Management .

Production and Operations Management, 2025

Abstract

This paper examines how the composition of product market managerial teams impacts the information and competitive landscapes in which firms operate. Specifically, greater team heterogeneity improves the likelihood the firm privately learns market demand. However, this also accentuates adverse selection concerns, which leads the firm’s rival to counter by becoming more aggressive in competition. This, in turn, forces the firm to cede some of its information advantage through disclosures. In effect, when designing teams to manage information, the firm must balance its learning needs with its rival’s competitive threats. This balancing act implies that heterogenous managerial teams are only optimal for the firm when product market competition is not fierce. Additionally, any inherent heterogeneity in the product markets in which the firm operates diminishes the demand for team heterogeneity.

Ram Ramanan is an Associate Professor of Accounting at the Indian School of Business (ISB). Before joining ISB, he served as a faculty member at the University of California, Davis and at SUNY, Binghamton.

Professor Ramanan’s research focuses on the role of accounting in management decisions. Specifically, he examines the incentive effects of financial reports and disclosures on various managerial decisions both inside an organisation and within supply chains. His work has been published in leading academic journals, including The Accounting Review, Journal of Accounting and Economics, The Review of Accounting Studies, Contemporary Accounting Research, Management Science, and Production and Operations Management.

At ISB Professor Ramanan teaches the core Managerial Accounting course and the elective in Strategic Performance Management.

Professor Ramanan holds a PhD in Accounting from the Kellogg School of Management, Northwestern University, and an MBA from the Indian Institute of Management, Bangalore. He is also a Chartered Accountant.

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Ram Ramanan