Category: Academic Departments
SMG’s Mathematical Finance program climbs three positions in Quantnet rankings
Boston University School of Management placed 14th on Quantnet’s list of the top master’s programs in financial engineering in North America, which represents a three-spot jump for the School.
The School’s 17-month Master of Science in Mathematical Finance program received a total score of 78, with 100 being perfect, missing the 12th position by only a point. It placed 17th in the previous Quantnet ranking.
The program, which integrates practical domains of mathematics with an in-depth study of the theory and practice of modern finance, has become increasingly competitive, and recognizes that, within three months of graduation, 80 percent of students received job offers.
Quantnet, an online resource that provides information on education and careers in financial engineering, surveyed program administrators, hiring managers, and quantitative finance professionals in order to compile its rankings.
A recent post on the Academy of Management Review’s (AMR) Ethicist Blog explores new questions gaining traction in management education: Are today’s students “ethically broken” when they enter business schools? And, “through the use of ‘normal’ business school language, modeling, and metrics,” in the classroom, does management faculty “perpetuate ‘broken’ student perspectives and behaviors”?
AMR turned to Boston University School of Management Assistant Professor Kabrina Kebrel Chang to answer these questions, writing, “Chang and her holistic re-framing of how Boston University School of Management is approaching business ethics were featured in a recent Wall Street Journal article. She is a lawyer who teaches business law and ethics at BU, and her research includes how social media is fundamentally influencing employment decisions.”
Asked about how she approaches ethics, particularly in the undergraduate classroom, Chang explains,
I am at a b-school in the Northeast and students are uber-motivated. Being in a business school, sadly I take it as a given that we will need to break many of the money=happiness equation. Breaking the equation has to happen in more than one class, and they have to see real examples.…My focus is on the critical thinking skills—getting [students] to broaden their horizons when it comes to decision-making will have a real impact on their ability to make decisions that will take into account the betterment of people and not just the betterment of their business….My take on ethics and the take I employ now…is not to teach [students] right and wrong but to teach them that there’s more to think about with a decision.
New Research from Yanbo Wang on Motivations for Cross-Border Reverse Mergers: Bonding Vs. Defrauding
From Siegel, J.I., & Wang, Y. (2012). “Cross-border reverse mergers: Causes and consequences.” Harvard Business School Strategy Unit Working Paper No. 12-089.
A new study by strategy scholars Jordan I. Siegel of Harvard Business School and Yanbo Wang of Boston University School of Management looks at the intersection of cross-border reverse mergers, corporate governance outcomes, and the motivational role of bonding vs. defrauding.
Firms typically pursue reverse mergers (where a non-U.S. company seeks to adopt U.S. state- or Federal-level corporate law by targeting a U.S. shell company bound by U.S. state- or Federal-level corporate law and merging with it) to gain a higher or lower level of legal oversight.
In their paper “Cross-Border Reverse Mergers: Causes and Consequences,” Siegel and Wang note that the literature on bonding has paid scant attention to reverse mergers involving state-level corporate law. They aim to correct this, in part because studying these mergers enables a comparison between firms who adopt only state-level corporate law and those renting both state-level corporate law and U.S. federal securities law.
Debunking assumptions about Chinese & Canadian firms in Nevada & Delaware
The researchers compile a study-set using statistics on cross-border reverse mergers into the U.S.; financial data from Capital IQ, Thomson ONE, Worldscope, and Osiris; SEC filing restatements and auditor changes from Audit Analytics; and data on formal enforcement outcomes. They then apply this data to widely held assumptions about cross-border reverse mergers. They explore such questions as:
- Is Delaware vs. Nevada a good proxy for a firm’s decision to bond itself vs. to defraud investors?
- Does the choice of a Big Four auditor prove far more important in determining the quality of corporate governance than the choice of U.S. state?
- Do Chinese reverse merger firms show more frequent negative corporate governance outcomes that Canadian reverse merger firms (the two main sources of cross-border reverse mergers into the U.S.)?
They find that:
- Later cohorts—companies who adopted the strategy of reverse mergers later, after the first wave of reverse-merger pioneers—tend to display more problematic accounting than the early adopters.
- Firms with Big Four auditors tend to display less problematic accounting.
- Chinese firms have no greater tendency to display problematic accounting than any other firms in the data set.
- The location of Nevada for the reverse-merger incorporation makes no difference in the likelihood of a firm displaying problematic accounting.
Are cross-border reverse mergers more corrupt than domestic ones?
The study also addresses whether the incidence of bad governance among the cross-border reverse merger sample proves different from among domestic reverse merger firms or American OTC firms in general. Among its findings:
- The cross-border reverse mergers had lower incidences of trading suspensions than U.S. OTCs for nearly all of the sample time period.
- The cross-border reverse mergers had lower incidences of SEC enforcement than either the domestic reverse mergers or the American OTC firms for nearly the entire sample time period.
- The cross-border reverse mergers had an incidence rate of private litigation that was mostly the same or lower than the two comparison groups for most of the sample time period.
Download a copy of the paper “Cross-Border Reverse Mergers: Causes and Consequences.”
From Ramarajan, L., & Reid, E. (Forthcoming). Shattering the myth of separate worlds: Negotiating non-work identities at work. Academy of Management Review.
How much of our self is defined by our work?
Now, with fundamental changes in the social organization of work, this fairly simple question has become surprisingly difficult to answer. Where, for example, do small business owners’ professional and personal identities begin and end? What about those of doctors, oil rig workers, or priests?
A new paper by Erin Reid, Assistant Professor of Organizational Behavior at Boston University School of Management, and Harvard Business School’s Lakshmi Ramarajan, brings the importance of these questions to light. Their article, forthcoming in the Academy of Management Review, departs from a decades-old “myth of separate worlds” about the personal and professional, as well as from the limits of past management research on identity, which has primarily focused on at-work identity.
Based on an extensive review of research on management, gender and work, work-family, and sociology, Reid and Ramarajan develop a new theory of how people manage their non-work identities in the workplace, arguing that exploring the former has become increasingly important to understanding productivity, employee engagement and well-being, and power dynamics in the latter.
A New Focus on the Importance of External Identities
Attributing the blurring of work and non-work life domains to the combined effects of declining job stability, rising workplace diversity, and the growth of communication technologies, the authors argue that many workers—whether an Indian call center employee posing as an American, a priest juggling a parish and a same-sex relationship, or a female engineer modifying her gender expression to increase perceived competence—must renegotiate the boundaries of their identities.
Due to a combination of work and life pressures and personal preferences, workers develop different strategies for negotiating gender, family, nationality, and other “non-work” selves in the workplace, Reid and Ramarajan find. Varying degrees of alignment between one’s preferences and the pressures they face both affects how workers manage their non-work identities and impacts their experience of the power relationship between themselves and their organization or occupation. “The greater the alignment,” the authors write, “the more likely people are to remain unaware of this power relationship or experience it as enabling.” Conversely, “the greater the misalignment, the more likely people are to acutely experience the power relationship as a constraint.”
Different Strategies, Different Selves
Through a literature review of 117 articles and books published between 1990-2012 or cited in research from this period, and using direct commentary from workers about their efforts to negotiate their non-work identities at work, Reid and Ramarajan create a matrix encompassing various pressures, preferences, strategies, and outcomes.
They identify pressures and preferences as either:
- Inclusionary, wherein people are encouraged to merge their work and non-work identities, or do so by choice; or
- Exclusionary, wherein workers are encouraged to keep their identities separate, or do so by choice.
The authors then map different worker strategies within varying combinations of pressures, preferences, and outcomes:
- Assenting strategies (such as luxury resort workers’ preferences for non-committal friendships and romantic relationships, due to a career requirement for frequent relocation), which are likely to improve workers’ well-being in the short term. However, in the long term, well-being may decline.
- Compliance strategies (exhibited, for instance, by a lesbian female priest who chooses to hide her sexual identity), which may appear positive for the organization, but can negatively impact well-being and may in the long run harm productivity and efficiency.
- Resistance strategies (found among Israeli Foreign Service employees who responded to employer pressure to curtail boisterous conduct by playing loud music), which may reduce commitment and be problematic in the short term, though offer potential for long-term positive change.
- Inversion strategies (whereby people neither comply with nor resist pressure but instead try to reinterpret the pressure to align with their personal preferences), which tends to offer positive short-term consequences with more ambiguous long-term effects.
Offering their map of findings as a foundation for future study, Reid and Ramarajan urge continued research on the symbiosis of work and non-work identities, as well as its critical consequences for organizations.
Boston University School of Management Named 8th in Operations Management Among Undergraduate Schools by Businessweek
Rank reflects an improvement of 21 spots over last year
Boston University School of Management placed 8th in the 2013 Bloomberg Businessweek “Best Undergraduate Business Schools for Operations Management” ranking, an advancement of 21 spots over last year.
This is one of several specialty rankings being released by Bloomberg Businessweek as part of the 2013 “Best Undergraduate Business Schools” ranking. In April, the School of Management placed 7th in Finance.
Each of these specialty rankings are particularly significant because they are based 100% on student response to a Bloomberg Businessweek survey of seniors at universities across the country focused on curriculum, content, and student experience.
The ranking comes after the School recently placed 18th in the country for overall student satisfaction, the highest ever placement for the School, and the School’s overall ranking of 23rd, the second highest in the School’s history.
Bodie, PBS notes, is “perhaps country’s foremost expert on pension finance”
The NewsHour blog “The Rundown” features insight on little-known safer investing strategies by the School of Management’s Zvi Bodie, “perhaps the country’s foremost expert on pension finance.” Bodie is Boston University’s Norman and Adele Barron Professor of Management in finance and author, most recently, of the books Risk Less and Prosper and Essentials of Investing, 9th Edition.
In his latest NewsHour post, titled “The One Safe Investment and Why You Never Hear About It,” Bodie writes,
…I recommend that for people concerned about preserving the purchasing power of their savings, an investment program should start with the purchase of US Treasury Series I Savings Bonds, of which you can purchase up to $10,000 per year per person….I Bonds provide the ultimate in long-run liquid financial security to residents of the U.S. An investor in these bonds cannot lose any money or any purchasing power for up to 30 years, despite either inflation or deflation. They provide a return at least equal to the rate of inflation and, often, have paid a “premium” of interest above and beyond inflation.
At the moment, because of historically low interest rates, that premium is zero, but it is reset every six months. If, in September (or the following March or a year from September, etc.), new I Bonds do offer a premium, you can sell the current ones and use the money to buy the new ones.
Read the full post, see all the comments it has inspired, and watch a related video on “The Rundown” blog.
From “Relating Badly to Brands,” appearing in the April 2013 Journal of Consumer Psychology
Brand managers may dream of customers relating to their brands as committed partners, best friends, soul mates, or allies, but what if a brand portfolio offers rocky marriages, one-night-stands, power plays, stalkers, and secret affairs?
How, for example, should the New York Philharmonic react to recent news that a large percentage of first-time ticket buyers felt “stalked” by their customer service calls? What about frequent flyers’ mixed—and often negative—emotions about their airline of “choice”?
We recognize negative relationships with other people and appreciate how complex and powerful they can be. So why not in our bonds with brands?
A recent study by Boston University School of Management professor Susan Fournier and doctoral candidate Claudio Alvarez “Relating Badly to Brands” (Journal of Consumer Psychology, April 2013) calls for a new science of negative brand relationships, a field overlooked by much current research. Fournier is a professor of marketing and has been named one of academia’s most influential researchers for her work on brand theory.
Alerting brand managers to the importance of the negative
Fournier and Alvarez note that although negative brand relationships are more common and frequently more powerful, positive brand relationships are supported by much richer academic frameworks. ”Negative brand relationships are in fact more common than positive relationships,” they write, “with an average split across categories of 55%/45% for negative and positive relationships, respectively….Without a formal accounting of negative relationships, our brand management frameworks are misleading and incomplete.”
Applying new data to a marketing theory by Park et al. called the “Attachment-Aversion continuum,” Fournier and Alvarez conduct two studies using subjects across four countries to identify the range of relationships people have with a variety of brands. They first identify four dimensions along which brand relationships vary: positive/negative, significant/superficial, equal/unequal power, and deliberate/not under my control. They then have consumers assign brands to categories resembling their own primary personal relationship dynamics.The results highlight 27 significant types of consumer-brand relationships, including “flings,” “broken engagements,” “stalker-prey,” “addict/dealer,” “fleeting acquaintance,” and more.
Are we really distant from all the “bad” brands in our lives?
One important finding from these studies is the challenging of the assumption that brand negativity stems from perceived distance between consumer and product. Building on their comparison between brands and interpersonal dynamics, the authors argue, “negative relationships do not all involve distanced self-connections and low interdependence between partners.” For instance, the authors point to past studies exploring the following brand relationships, encompassing both the passionate (or close) and the negative:
- The ”monstrous relationships” fans have with the Twilight media brand, which justifies partner violence and emotional abuse as an ultimate act of protection and love
- Products that generate compulsive consumption, addictions, and dependencies, from alcohol to cigarettes to social media
- Credit card and consumer lending agencies, including ones where “consumers are lured into lending relationships with a courteous attitude and quick, easy credit offered under conditions that are not fully disclosed”
As negative brand relationships are common and cause damage to both consumers and companies, Fournier and Alvarez urge, “managing negatives may actually be more important for brand equity development than cultivating positive connections with brands.”
Read more about “Relating Badly to Brands” in the Journal of Consumer Psychology.
Assisting Institute on Research for Better Patient Decisions & Outcomes
Boston University School of Management’s Alan Cohen has been appointed to the federal Advisory Panel on Improving Healthcare Systems by the Patient-Centered Outcomes Research Institute (PCORI), created by the Affordable Care Act of 2010.
PCORI is an institute authorized by Congress to research and provide information to both patients and health care providers with the goal of enabling more informed medical and health-related decisions.
According to PCORI, the Advisory Panel on Improving Healthcare Systems is one of four panels appointed to represent the institute’s “broad stakeholder community.” In addition to enhancing healthcare systems, these expert panels will guide PCORI’s efforts to improve patient engagement, address disparities, and enable better patient and practitioner assessment of options for prevention, diagnosis, and treatment.
Along with twenty other leading researchers, clinicians, industry representatives, policymakers, and patient advocates in the field of improving healthcare systems and outcomes, Professor Cohen will help the institute “refine and prioritize research questions, provide needed scientific and technical expertise….and help us model full and meaningful patient and stakeholder engagement efforts.”
Cohen is a professor of health policy and management at Boston University and executive director of the School’s Health Policy Institute. He was formerly vice president for Research and Evaluation at the Robert Wood Johnson Foundation (RWJF), the nation’s largest philanthropic organization dedicated solely to public health, where in 2012 he was named a “Luminary” for his role in research and initiatives having a major impact on the field in the previous forty years. Cohen is also principal author of the book Technology in American Health Care: Policy Directions for Effective Evaluation and Management.
The annual magazine Research at Boston University has profiled the pioneering work and social impact of the School of Management’s Nalin Kulatilaka. In their feature “Considering Community,” they write,
Perhaps it is no wonder that an electrical engineer who became a professor of finance would take an interest in how green buildings can provide monetary benefits for the people who have the resources to fund renewable energy projects….
That’s part of the story of Nalin Kulatilaka, who teaches in the School of Management and is a codirector of the Clean Energy & Environmental Sustainability Initiative.
“My research is on sustainable energy investments,” Kulatilaka says. “From renewable energy sources like solar and wind to energy conservation and energy efficiency investments like building retrofits.”
The thrust of his work is to incentivize the up-front funding for green energy buildings from banks and other sources by writing a new kind of contract for the loans that fuel such changes. The contracts are intended to monetize the savings that green energy can achieve, so that the investors who put up the capital can capture some of the money saved as revenue from the project.
“We are now designing contracts where the building owner and tenant could share the savings.”
Recently, Kulatilaka has worked on buildings owned by the Cambridge Housing Authority in Central Square. Some were heated entirely by electricity, some were particularly leaky, and all lacked the investment capital needed for retrofits.
“My contribution there, with Professor of Earth & Environment Robert Kaufmann and a team of students, was to first assess the opportunity; to try to quantify what the savings would be by using various statistical techniques that analyze the demand patterns of the building,” he says.
“We are now designing contracts where the building owner and the tenant could share the savings. These would occur in such a way that funding could be attracted from conventional—or at least semi-conventional—sources like large banks.”
Boston University School of Management Named 7th in Finance Among Undergraduate Schools by Businessweek
Rank advances from 23rd last year
Boston University School of Management placed 7th in the 2013 Bloomberg Businessweek “Best Undergraduate Business Schools for Finance” ranking, an advancement of 16 spots from last year.
The ranking is based 100% on student response to a Bloomberg Businessweek survey of seniors at universities across the country focused on curriculum, content, and student experience. The survey was conducted as part of the 2013 “Best Undergraduate Business Schools” ranking. Finance is the first specialty ranking to be released, with more to be released in the coming weeks.
This ranking further demonstrates the exceptional level of satisfaction students have for their experiences at the School, particularly within finance course offerings and career preparation. The ranking comes after the School recently placed 18th in the country for overall student satisfaction, the highest ever placement for the School, and the School’s overall ranking of 23rd, the second highest in the School’s history.