Category: Academic Departments
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.
“It’s a mandate! It’s a tax! How word choice effects Obamacare enrollment.”
The Washington Post‘s Wonkblog, in their Health Reform Watch column, recently spotlighted a study co-authored by Boston University’s Keith Marzilli Ericson on the impact of terminology on enrollment in mandated health insurance. Ericson, an assistant professor of markets, public policy, and law at the School of Management, is also co-author of a related National Bureau of Economic Research paper titled “Pricing Regulation and Imperfect Competition on the Massachusetts Health Insurance Exchange.”
As The Washington Post reports,
It was this week, one year ago, that the Affordable Care Act had its day in court—the Supreme Court, that is.
The health care law had the longest oral arguments of any case the high court has heard; supporters lined up for a seat in the courthouse four days in advance.
Obamacare’s mandated purchase of health coverage survived the challenge. It may not, however, have gotten off scot free: New research suggests the controversy over the mandate may been a blow to its credibility—and Americans’ willingness to comply.
That’s the takeaway from a new paper, authored by Boston University’s Keith Marzilli Ericson and University of Pennsylvania’s Judd Kessler that looks at the difference between describing the health law’s penalty for not carrying insurance as a “mandate” or a “tax.”
The two are, as Ericson describes it, “logically identical.” Beginning in 2014, a person who fails to purchase health insurance will pay a $95 fine, regardless of whether they consider that a tax penalty or a fee for non-compliance with the mandate.
Ericson, whose research focuses on the intersection of health insurance and behavioral economics, had an inkling that the description would matter. He has researched the Massachusetts health reform effort, where a mandate helped the state achieve the highest rate of insurance in the country.
“We expected that the mandate would encourage insurance purchase more than a tax,” he says. “We thought that it establishes a social norm, and a sense of obligation.”
Banner photo courtesy of flickr user DigiDreamGrafix.com
Controversy surrounds Best Buy’s and Yahoo’s decisions to abolish working at home
Excerpts from BU Today:
Last week, Best Buy became the second Fortune 500 Company to announce recently that employees would no longer be allowed to work from home.
Best Buy’s decision came on the heels of an announcement by Yahoo CEO Marissa Mayer that employees of the struggling internet company could no longer work remotely.
Yahoo—and now Best Buy—are bucking the corporate trend toward more workplace flexibility. A recent Census Bureau report found that 13 million people, or 9.4 percent of U.S. employees, worked at home at least one day per week in 2010, compared with 9.2 million people, or 7 percent of workers, in 1997.
BU Today spoke with Kathy Kram, Richard C. Shipley Professor in Management and a School of Management professor of organizational behavior, about the potential benefits and negative consequences of a work-from-home ban for a company like Yahoo and its employees.
BU Today: First Yahoo and now Best Buy have generated enormous controversy over their decision to no longer allow employees to work from home. Do you think other CEOs will follow?
Kram: It sounded like an unusual move, and the reactions to it, although it’s early, have been mixed. I think other CEOs will wait to see what the impact and unintended consequences are of such a policy.
What are some of the negative effects Yahoo might face by requiring all employees to work on site?
My prediction is it could have a negative effect on retention, hiring, and morale. I don’t know if the new policy would have enough benefits in terms of fostering innovation to outweigh those costs.
Younger people are much more inclined to want an integrated life, where being at the workplace doesn’t dominate their existence, and so the option to work at home is highly valued. The most negative effects would be in the early stages of people’s careers, when they are having families. Potential hires might see Yahoo as a less desirable employer.
Faculty promoted this year are from College of Arts & Sciences, the College of Engineering, and the School of Management
Excerpts from BU Today:
From mapping marketing strategies to mapping the brain, the 17 BU faculty members who have just been promoted to full professor cover a wide and compelling range of research interests.
Shuba Srinivasan, a newly minted SMG professor of marketing, views her promotion as an acknowledgment of years of hard work.
“This promotion represents a major milestone recognizing years of sustained effort on several fronts,” says Srinivasan. In addition to designing effective courses in her area of expertise—marketing analytics—Srinivasan has bridged the gap between marketing theory and practice in her research. “This promotion affirms all of this,” she says.
Faculty are selected for promotion based on the quality of the research and scholarship conducted in their classrooms and laboratories.
“Outstanding faculty are at the heart of what defines a successful research institution,” says Jean Morrison, University provost and chief academic officer. “The 17 exceptional scholars we recognize are as talented as they are diverse, each demonstrating the passion for teaching and willingness to reach across disciplines that enable Boston University each day to create new knowledge, generate new ideas, and make important new practical discoveries. From the humanities and sciences to engineering and business, all have emerged as leaders committed to excellence in their individual fields. We are excited to announce their promotion to full professor and for the great work each has in store.”
Read the full story on BU Today.
Palazzo, B. (2012). Cash holdings, risk, and expected returns. Journal of Financial Economics, 104(1), 162–185.
A recent paper by Boston University School of Management’s Berardino Palazzo, an assistant professor of finance, approaches the relationship between an organization’s savings and its vulnerability from a unique angle. His article, “Cash Holdings, Risk, and Expected Returns,” explores the link between a firm’s cash holdings and the broader, systematic risks it faces, rather than focusing narrowly on the relationship between cash holdings and the firm’s specific cash flow volatility, as previous finance studies have done. This study was recently published in the Journal of Financial Economics.
Palazzo follows a recent strand of financial accounting literature to derive a proxy for a firm’s exposure to systematic risk. His findings illustrate how such systematic risk affects firms’ optimal cash holding policies.
The Riskier the Firm, The Higher Its Savings
Palazzo points out that previous studies ignore the overwhelming likelihood that investors are risk-averse. Instead, his paper rests on the assumption that investors are not risk-neutral. “[R]iskier firms,” he writes, “have the highest hedging needs because they are more likely to experience a cash flow shortfall in those states in which they need external financing the most.” Thus, the riskier the firm, the higher its optimal savings are.
Using a data-set of US public companies, Palazzo finds:
- Changes in cash holdings from one period to the next are positively related to beginning–of–period expected equity returns; firms with a higher expected equity return will experience a larger increase in their cash balance.
- Using market size and current profitability as measures, or proxies, firms with higher expected profitability have a larger sensitivity of cash holdings to expected equity returns.
- When using a book-to-market ratio, this correlation is weaker—not a surprise, Palazzo notes, given that the book-to-market ratio is a catch-all proxy for many variables besides future profitability.
- The higher the correlation between cash flows and an aggregate shock—in other words, the riskier the firm—the more the firm hoards cash as a hedge against the risk of a future cash flow shortfall, meaning the higher the savings.
- High cash firms have more growth opportunities but lower current profitability and, as a consequence, they are less exposed to a variety of risks. However, such firms earn a larger and significant risk–adjusted return compared to firms with a low cash–to–asset ratio.