Category: Academic Departments
To Understand Consumer Data, Think Like an Anthropologist
Harvard Business Review featured a piece from Questrom Professor in Management Susan Fournier and Bob Rietveld, managing director and cofounder of Netherlands-based marketing analytics firm Oxyme, in which the two write that the meaning within consumer data lies with social media, such as pictures and comments on products, not with percentages. Focusing on social-media chatter can have a profound impact on a firm’s consumer knowledge and, consequently, its profitability. Unfortunately, the piece notes, many people in business don’t appreciate the value of that chatter. Rather than treat consumer comments as noise, use social media as a glimpse into the consumer’s life and discover how he or she is really living. In other words, think like an anthropologist.
“Sure, sure,” the numbers-oriented marketing executives may say. Social listening is great for “exploratory” research, but only as a precursor to “real” research that will determine the truth of what’s being said online. What’s needed, they’ll tell you, is broad-based consumer research using representative samples and adequate sample sizes.
Querying a representative sample is great for testing a hypothesis or finding a statistical relationship between known concepts. But often, in marketing, you’re dealing with multiple unknowns. Social listening doesn’t presuppose anything. It has no constraints. Although qualitative information won’t give you a simple equation or statistic that you can show the CEO, it can provide answers to questions you didn’t even know you had.
And comments from a non-representative sample can be highly illuminating. For example, in tech markets, think of the users who regularly post to discussion groups focused on tech products. These knowledgeable netizens provide critical knowledge about product uptake and issues around quality or perception. The same can be said of fan groups and user groups in a variety of fields.
An important player in the electric-shaver category discovered this. Before the launch of a high-end shaver that was to be priced at more than $500 and was encased in brushed aluminum, an Australian retailer posted pictures and specifications of the product online. Almost immediately, consumers began commenting about the product’s “plastic aesthetic” and “cheap look and feel.” The manufacturer took prompt action, posting a new photo series highlighting the quality manufacturing process and construction, neutralizing the negative sentiment spreading online.
Successfully disseminating the results of social listening requires skill at seeing stories and developing insights from messy data. It also requires a penchant for simplicity.
Read the full piece here.
From Dellarocas, C., Katona, Z., & Rand, W. (2013). Media, aggregators and the link economy: Strategic hyperlink formation in content networks. Management Science, 59 (10), 2360-2379.
In today’s link economy, whether a blogger paraphrases news articles or a fully automated aggregator harvests content from across the web, the pathways between content producers and audiences have become increasingly complex. So how should content producers respond to competition from aggregators and from each other?
How should content producers respond to competition from aggregators and from each other?
A new study from Boston University School of Management’s Chrysanthos Dellarocas, professor of information systems and director of Boston University’s Digital Learning Initiative, together with Zsolt Katona (University of California at Berkeley) and William Rand (University of Maryland), is the first to model the complex, interrelated implications of strategic hyperlinking and investment in content production. Their analysis, demonstrating scenarios in which such links can boost everyone’s profits, thus yields important implications for professional content producers who have until now been reluctant to link to competitors.
When Linking Increases Profits
Addressing questions relevant to both firms and regulators, Dellarocas et al. identify gaps in existing network economics research around the impact of freely established links and the strategies that motivate their formation. For example, what are the effects of linking to competitors, and when should inbound links be refused?
Dellarocas and his co-authors show that although linking can result in low-quality sites free-riding on high-quality content, “in settings where there are evenly matched competitors, the option of placing links across sites may lead to equilibria where some or all sites are better off relative to a no-link setting.”
Links between peer content sites can increase profits by reducing competition, overproduction, and duplication. The intuition is that, instead of each site expending resources to produce what is essentially duplicate content, everyone can benefit if one site specializes in producing really good content and other sites link to it. Sites that invest in high-quality content benefit from additional referred traffic, while those publishing the links become trusted hubs that attract visitors without having to pay the cost of content production. Different sites might specialize in producing content on different topics, one on politics and another on sports, for example. Thus, all sites produce the type of content they are best at and link to the rest. In this scenario, consumers benefit all-round.
The authors point out that the above scenario can sustain the market entry of inefficient players, allowing them to free-ride on the success of other content sites by linking to them, potentially denting the revenues of target sites. Still, no content site would benefit from unilaterally blocking such links, because then free-riding sites would simply link to their competitors.
The Impact of Aggregators
Acknowledging that aggregators ‘steal’ traffic from content sites, the authors also point out that, “by making it easier for consumers to access good content, aggregators increase the attractiveness of the entire content ecosystem and, thus, also attract traffic away from alternative media.”
While aggregators may direct more traffic to high-quality sites, they also take away a slice of profits from content sites. This happens because some aggregator visitors check article headlines and snippets at the aggregator but never click through to the original articles. Furthermore, aggregators tend to increase competition between content sites. This may boost quality but reduce content producer profits.
See more about “Media, Aggregators and the Link Economy: Strategic Hyperlink Formation in Content Networks,” at Management Science.
Media references SMG assistant professor’s paper “Fake it Till You Make it”
The Wall Street Journal has repeatedly spotlighted the research of Georgios Zervas, Boston University School of Management assistant professor of marketing, on the consequences of fake online reviews. Both the Journal’s Corporate Intelligence blog and its “Morning Risk Report,” which provides insights and news on governance, risk, and compliance, featured recent posts on the writing and solicitation of fake online reviews.
One post, “Fake Reviews Raise Reputation Stakes,” was prompted by New York attorney general Eric Schneiderman’s targeting fraudulent online reviewers this week under his new initiative “Operation Clean Turf,” a yearlong undercover investigation into the reputation management industry, the manipulation of consumer-review websites, and the practice of astroturfing.
Zervas notes that the consequences for writing and soliciting fake reviews are very low and that, for anyone with a computer, crafting a fake review is simple. He is quoted saying:
“The New York attorney general is trying to increase the cost of being uncovered as a fraudster. I think it’s a small first step in the right direction.”
Zervas, who completed his PhD in 2011 in computer science at Boston University, also explains that the problem of fake reviews extends beyond New York’s borders. His paper “Fake it Till You Make it” was co-authored with Harvard Business School assistant professor Michael Luca.
Focusing on the issue of fake restaurant reports, BBC News, in the article “Yelp admits a quarter of submitted reviews could be fake,” writes,
Michael Luca of Harvard Business School and Georgios Zervas of Boston University studied the incidence of fraudulent reviews of Boston restaurants posted to Yelp, including those that had been filtered out.
After analysing more than 310,000 reviews of 3,625 restaurants, they found that negative fake reviews occurred in response to increased competition, while positive fake reviews were used to strengthen a weak reputation or to counteract unflattering reviews.
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.