Category: Academic Departments
On January 29, Forbes.com featured the research of Boston University’s Kathy Kram, in the article “3 Ways to Develop Your People Without Overwhelming Yourself.” Kram is the Richard C. Shipley Professor in Management and an expert in the field of mentoring.
The article, by Michael Campbell of the Center for Creative Leadership, explores a different approach senior leaders lacking adequate time can take to mentoring and developing others. John Ryan, president of the Center for Creative Leadership, is speaking at the School on February 28.
3 Ways to Develop Your People Without Overwhelming Yourself
Senior leaders consistently report that they don’t have enough time for mentoring and developing others.
Up-and-coming leaders consistently report wanting more guidance, mentoring and face time to learn from senior leaders.
One way to address this dilemma? Developmental networks.
Instead of taking on the formal role of sole coach or mentor to those you are responsible for developing (or to meet that performance metric of “develops others”), you can help your talent build a network of relationships that will – as a whole – provide the support they need for the next role or level.
Research conducted by Kathy Kram (Boston University) and Monica Higgins (Harvard University) indicates that people who develop faster have a strong network of developmental relationships. This parallels findings from Rob Cross of the University of Virginia that shows a clear correlation between high performance and robust networks.
As someone responsible for developing others, you can help your talent learn and grow in a more strategic way. Here’s how it works.
Start by looking at current developmental relationships. Help your direct report or mentee assess what their developmental network looks like today. Explain that a developmental network is made up of individuals who have a genuine interest in your development and who are qualified to assist you in your learning. Keep in mind, developmental relationships are deliberately and clearly about learning and growth.
You can quickly get a picture of the network by asking, during the past 12 months who are the people who have taken an interest and concerted action to help you advance your career? See if they can list 5-10 and then note the type of relationship (boss, peer, direct report, family, etc.)
Students, faculty, staff, alumni, and friends interested in the topic are invited to attend a Dean’s Speaker Series event with John Ryan, president of the Center for Creative Leadership, at the School on February 28.
In the February edition of American Banker magazine, Boston University’s Mark Williams authored the commentary piece “Reduce Taxpayer Risk: Roll Back FDIC Limits.” Williams is an executive-in-residence and master lecturer at the School of Management, an expert on risk management, former Federal Reserve examiner, and author of the book Uncontrolled Risk: The Lessons of Lehman Brothers.
Reduce Taxpayer Risk: Roll Back FDIC Limits
FDIC insurance is more than just a sticker affixed to a bank door, it is a gold-plated guarantee that the government will step in and make depositors whole. Bank customers accept that they will earn a quarter of a percent or less on their deposits because they understand that their money is protected. And banks large and small benefit from this access to a cheap and dependable source of funding.
When it began, FDIC insurance provided depositors with only modest protection. The initial coverage limit in 1934 was $2,500, or less than $45,000 in today’s dollars. Six months later, the limit was raised to $5,000 (still less than $86,000 adjusted for inflation) and the risk-sharing arrangement between banks, depositors and the government was forever changed. As long as depositors stayed within set limits, they assumed zero risk. But if the dollar size of bank failures exceeded the fees collected from the banks, then the government, and taxpayers, would become the ultimate financial backstop.
In recent years, FDIC insurance has experienced mission creep. Having grown at over twice the rate of inflation, it now provides more than modest protection.
Few Americans have the means to keep deposits of $250,000 and benefit from this protection. Instead, the larger limits have tilted the risk-sharing in favor of wealthier depositors and banks themselves.
Read Williams’ full piece on American Banker.
Carroll, A.B., Lipartito, K.J., Post, J.E., Werhane, P. H., & Goodpaster, K.E. (2012). Corporate Responsibility: The American Experience, Cambridge University Press.
Since the dawn of capitalism, nations have struggled to solve “the corporate dilemma.” On one hand, corporations–capitalism’s dominant organizational form–have proven effective mechanisms for producing wealth, meeting consumer needs, and building industries that employ millions. On the other hand, they often impose costly negative externalities on workers, communities, and the natural environment. Corporate responsibility is the “third way” between self-interest and government regulation to address this dilemma.
But to whom do corporations owe a responsibility? For what? And how are those responsibilities, once defined, to be met?
These questions have haunted capitalism throughout the twentieth and twenty-first centuries, both in the US and abroad. Although today constructive corporate citizenship is a hallmark of many leading companies, no single-volume history exists of the concept and practice of corporate responsibility. In his new book, Boston University School of Management’s James E. Post, the John F. Smith Professor in Management, aims to fill this gap. Along with a team of four senior scholars and nearly a dozen research aides, Post and his co-authors have published Corporate Responsibility: The American Experience, from Cambridge University Press.
The story behind the rise of corporate citizenship
This book tells the story of how corporate responsibility emerged as both an idea and practice in the modern firm. Says Bill George, former chairman and CEO of Medtronics and current faculty member at Harvard Business School, the work is “brilliantly researched and beautifully written.” It also a offers gallery of nearly 100 pictures, most in color, featuring seminal moments in the history of corporate citizenship.
“Brilliantly researched and beautifully written“ – Bill George, Former Chairman & CEO, Medtronics; Professor, Management Practice, Harvard Business School
“Our vision, and our hope,” says Post, “was to create a compelling historical narrative of how corporate responsibility emerged as a concept and became part of the American business psyche. It is an idea that has had a significant and enduring influence on both corporate rhetoric and behavior. Now, we offer the story of how business practice has changed as our nation (and the world) evolved, social pressures built, and companies were challenged to respond and then anticipate where these transformations would lead.”
This is no whitewash of business practice, Post explains. The book candidly covers examples of labor violence, such as the slaughter of dozens of miners, women, and children in Ludlow, Colorado in the infamous Shirtwaist Triangle factory fire; sweatshop conditions in modern factories; and the recent Occupy Wall Street movement. But it also offers inspiring stories as well, such as J. Irwin Miller’s leadership in civil rights as CEO of Cummins Engine Company; Bill Norris’ commitment to radical social innovation in Minneapolis as CEO of Control Data; General Mills’ 150 years of corporate volunteerism and community philanthropy; and the role of women as crusaders, activists, and critical contributors to industrial development and family-friendly and fair workplace policies.
Boston University’s heritage in creating corporate, and social, value
New England companies have often been in the vanguard of corporate citizenship. Post explains that “locally, many Boston University alumni will remember the role of Boston businesses in school desegregation; Polaroid’s withdrawal from the South Africa of apartheid days; and Aaron Feuerstein’s bold commitment to continue paying workers who were unemployed as a result of the great Malden Mills fire in Lawrence, Massachusetts in December 1995.” Progressive human relations practices remain a hallmark of many local companies, Post points out: Ben and Jerry’s, Seventh Generation, Tom’s of Maine, and other New England-bred models of social entrepreneurship.
While belief in corporate responsibility is part of America’s cultural fabric, it is also part of Boston University’s heritage. The founding dean of the School of Management, which in 2013 celebrates its 100th year of classes, was Everett W. Lord: an activist for child labor protection, a believer in professional education, and author of The Fundamentals of Business Ethics. The book, published in 1926, challenges students and business leaders alike to view ethics and integrity as the keys to personal success. To Dean Lord and his successors, the purpose of business has always been “service to society.”
About James E. Post
James E. Post teaches in the Markets, Public Policy & Law department in the School of Management, and has been involved in conceptual and practical debates over these issues in many forums since joining the Boston University School of Management faculty in 1974. He criticized companies that engaged in questionable marketing of baby formula in the 1980s, then consulted with the World Health Organization on a pioneering international code of marketing practices. He has worked to professionalize corporate public affairs in the U.S., Europe, and Australia, has written extensively about the concept and practice of business and society, and is frequently cited in the media for his expertise. In 2010, Post received a lifetime achievement award from the Aspen Institute.
Read more about the book Corporate Responsibility: The American Experience.
From “A Hidden Markov Model for Collaborative Filtering,” MIS Quarterly, 36(4), 1329-1356.
Commercial websites are constantly suggesting new products and content to us—a mechanized, cyber-age form of the old urging, “if you liked that, you’ll love this!” In tech terms, the systems that generate these suggestions are called personalized recommender systems. But how can these computer systems account for the age-old human tendency to change our desires as time goes on?
A new study by Boston University’s Nachiketa Sahoo and co-authors Param Vir Singh and Tridas Mukhopadhyay is one of the first to address this problem.
Sahoo is an assistant professor in information systems at Boston University School of Management; Singh and Mukhopadhyay are faculty members at the David A. Tepper School of Business at Carnegie Mellon University. Their paper, “A Hidden Markov Model for Collaborative Filtering,” appearing in MIS Quarterly‘s special issue on business intelligence research, suggests using a stochastic algorithm called a hidden Markov model (HMM) to process data about user activity and preferences, rather than the common algorithms used now by most personalized recommender systems. The authors show that the HMM, a more dynamic model, allows online personalized recommender systems to account for changing user preferences.
A New Model to Address Changing User Preferences
The authors point out that dynamic, not static, user tastes and desires are integral to the consumer experience, particularly with the repeat consumption of so-called “experience goods,” such as movies, music, and news. “This causes problems for a recommender system that has been trained to identify customers’ preferences from their past ratings of products,” the authors write.
Sahoo et al. propose a customized HMM algorithm to estimate user preferences and make recommendations. They evaluate their approaches using three real-world datasets: one containing employees’ blog reading activity in a Fortune 500 IT services firm, one documenting users’ movie watching behavior in the Netflix Prize dataset, and one tracking users’ music listening behavior on last.fm. Comparing the performance of their algorithm with that of several other popular algorithms in recommender systems, the authors show that the HMM-based algorithm performs as well or better than the other algorithms, particularly as user preferences change.
Their approach is based on the intuition that older data, rather than being discounted—as they are in some current personalized recommender systems—could instead be used to learn about that user’s preference and then applied to another user. “Data from a user’s past may not be useful for making recommendation for the user now,” they argue, since “her preference has changed, but it might be useful for making a recommendation for someone who currently has that preference.”
Read more about ”A Hidden Markov Model for Collaborative Filtering.”
Banner photo is a visualization of related movies found by a computer algorithm created for Netflix Prize. Each movie is represented by a dot, and colored lines signify a similarity between pairs. Photo courtesy of flickr user chef_ele.
On January 10, Jacqueline J. and Arthur S. Bahr Professor of Management Michael Salinger‘s piece “Why the FTC Was Right Not to Sue Google” was featured in the Forbes Leadership Forum on Forbes.com. Salinger, a professor in the Markets, Public Policy & Law department, is a former Director of the Bureau of Economics at the United States Federal Trade Commission.
January 3 should go down as one of the most important and proudest moments in the history of United States antitrust enforcement. After a 19-month inquiry, the Federal Trade Commission announced that it had voted unanimously to close its investigation into the design of Google’s search results. The FTC’s decision is a victory for Google, a defeat for those who tried to persuade the FTC to use the antitrust laws to hinder rather than promote competition, and a victory for Google users. It is not easy for a law enforcement agency to devote substantial resources to an investigation and then not bring a case, but sound antitrust enforcement dictates that it must do so when, as happened here, the investigation failed to uncover evidence of a violation.
To understand what was at stake in the case, go to Google and enter a query for “New York weather.” The top result will say “Weather for New York, NY,” with a minimal four-day forecast that may be sufficient for some users. Just below that will be links to sites that provide more detailed weather information. To the extent that users find the information provided directly by Google to be sufficient, weather sites might get less traffic. But Google users are better off, and that is the key point. As FTC Chairman Jon Leibowitz explained about the FTC’s decision, the antitrust laws are supposed to protect competition, not individual competitors. And, far from being an antitrust violation, improving search results to get users the information they need is precisely the sort of competition the antitrust laws are supposed to encourage.
Read Salinger’s full piece on Forbes.com.
Banner image courtesy of flickr user Robert Scoble.
Karim, Samina (2012). “Exploring structural embeddedness of product market activities and resources within business units.“ Strategic Organization 10(4): 333-365.
The lead article in the November 2012 issue of Strategic Organization is Samina Karim‘s study “Exploring structural embeddedness of product market activities and resources within business units.”
Karim is an assistant professor in strategy and innovation at Boston University School of Management.
This paper defines “embeddedness” as the dependence on routines and coordination mechanisms within one’s own business unit, and explores the degree to which embeddedness impacts the success of product market activities (PMA). Karim focuses on which alternative better supports the longevity of a product market within the firm: 1) moving a PMA out of one unit and into another, or 2) moving the entire unit with its PMA into another unit (so that the PMA is still managed in its original organizational context, even though it is now “housed” in another, bigger unit).
Among Karim’s findings:
- If activities and resources are highly embedded in their business units, then “reconfiguring” a unit (by adding to it, trimming it down, or recombining it with another unit) may have consequences on how successful the firm is at its product market activities.
- Moving an entire unit with its PMA into another unit leads to a greater likelihood of retaining the PMA (i.e. the PMA will not be not divested or shut down).
For managers within PMA units, the practical insights of Karim’s study include:
- If managers are going to move a PMA from one unit to another, they are better off recombining the entire unit into the other than simply moving the PMA from one to the other.
- If managers are going to move a PMA from one unit to another, they should be less worried about whether the PMA was acquired or not, and more focused on whether, during the move, they can keep intact the PMA’s former unit’s routines and processes.
“Pricing Regulation and Imperfect Competition on the Massachusetts Health Insurance Exchange”
A new National Bureau of Economic Research (NBER) study, authored by Keith M. Marzilli Ericson and Amanda Starc and focused on pricing regulation in health insurance exchanges (HIE), shows that purchasing mandates can be essential to the functioning of this entire market.
Ericson is an assistant professor of markets, public policy, and law at Boston University School of Management. Starc is an assistant professor of health care management at the Wharton School at the University of Pennsylvania.
Their study, “Pricing Regulation and Imperfect Competition on the Massachusetts Health Insurance Exchange,” explores pricing regulation, consumer demand, and insurer profits in HIE, which are government-run marketplaces for private insurance. The authors use data from Massachusetts’s HIE, the first in the nation, and then apply these data to the broader functioning of health exchanges themselves. Their focus on the mandate, requiring citizens to purchase a minimum level of insurance, sheds light on one of the most controversial issues in Congress’ recent struggles over health care across America.
HIEs: An Ideal Context for Exploring Consumer Welfare, Regulation, and Profit
The authors point out that HIEs offer an ideal opportunity to study issues of consumer welfare, competition, government regulation, and firm profits, as they offer a wide range of choice to consumers in the context of a heavily regulated environment. Moreover, in the next few years, a projected 20 million Americans across the country will purchase health insurance through these exchanges, as the 2010 Affordable Care Act has mandated that states and the federal government develop HIEs.
But Ericson and Starc note a lack of previous research exploring how insurance pricing regulation actually functions in markets where firms have some market power to charge prices above their costs—a condition they refer to as “imperfect competition.”
Their new NBER study fills this gap.
“If the Mandate Is Removed, Markets Can Unravel”
Ericson and Starc first execute a series of simulations based on data from the Massachusetts HIE to show how changing regulations on insurers can vary prices between different types of consumers (such as older vs. younger consumers) and can impact other important and controversial insurance market regulations, such as minimum loss ratios (which attempt to limit insurer profits), risk adjustment (which attempts to equalize insurers’ costs derived from insuring different populations), and mandated insurance purchase (which attempts to ensure market participation).
Ultimately, the study’s simulations show that if the mandate is removed, markets can unravel, due to differences in preferences across a broad population where a significant segment of that population would be willing to withdraw from the market altogether if they can’t find a price they are willing to pay.
If consumers are allowed to opt out of coverage, the authors note, the most price-sensitive consumers—who tend to be both young and relatively healthy—will tend to opt out. As these consumers opt out, the less price-sensitive consumers—who tend to be both older and have higher health costs—are the ones remaining in the market, which in turn leads to higher markups. If enough people are willing to drop out of the market altogether, the authors note, “a death spiral” can occur. “As a result,” Ericson and Starc show, “a weak or absent mandate may negate the consumer surplus gains achieved” from the other regulations still in place.
Read more about the study “Pricing Regulation and Imperfect Competition on the Massachusetts Health Insurance Exchange.”
Banner photo courtesy of flickr user Images_of_Money.
From MIT Sloan Management Review‘s Innovation Issue
In the Winter 2013 “Innovation” issue of MIT Sloan Management Review, Senior Associate Dean, Professor in Organizational Behavior, and Everett W. Lord Distinguished Faculty Scholar Karen Golden-Biddle explores a new approach to organizational transformation and meaningful change:
Too often, conventional approaches to organizational transformation resemble the Big Bang theory. Change occurs all at once, on a large scale and often in response to crisis. These approaches assume that people need to be jolted out of complacency to embrace new ideas and practices. To make that happen, senior management creates a sense of urgency or takes dramatic action to trigger change. Frequently, the jolt comes from a new CEO eager to put his or her stamp on the organization. Yet we know from a great deal of experience that Big Bang transformation attempts often fail, fostering employee discontent and producing mediocre solutions with little lasting impact.
But meaningful change need not happen this way. Instead of undertaking a risky, large-scale makeover, organizations can seed transformation by collectively uncovering “everyday disconnects” — the disparities between our expectations about how work is carried out and how it actually is. The discovery of such disconnects encourages people to think about how the work might be done differently. Continuously pursuing these smaller-scale changes — and then weaving them together — offers a practical middle path between large-scale transformation and small-scale pilot projects that run the risk of producing too little too late.
Researchers tend to overlook this option because few managers have employed it until recently, assuming they needed to take an all (Big Bang) or small (pilot projects sequestered away from the dominant organizational culture) approach to organization change. That may have been more true in the past when organization boundaries were less malleable, communication more difficult and people less mobile. However, today’s complex and connected global environment makes step-by-step transformation by managers inside most organizations a real possibility…
Banner photo courtesy of flickr user Yogesh Mhatre.
New Study Uncovers Green Eco-Seals’ Opposing Impact on Different Consumer Types
Researchers Barbara Bickart and Julie Ruth have completed a study filling a crucial gap in advertisers’ knowledge about the efficacy of green marketing techniques such as eco-seals, showing that they have a distinctly different impact—and in fact sometimes opposing effects—on different types of consumers.
Bickart and Ruth are associate professors in marketing at Boston University School of Management and Rutgers University, respectively. Their new study, “Green Eco-seals and Advertising Persuasion,” is forthcoming in the Journal of Advertising‘s special issue on green advertising.
Bickart and Ruth focus on the differing persuasiveness of eco-seals for consumers with high versus low concern about environmental issues, as well as with high versus low familiarity with a brand. They also offer insight into how these different consumers react depending on an eco-seal’s source and the type of specific messaging it provides.
Among their findings:
- When consumers have a low-level of environmental concern, the presence or absence of an eco-seal on a package has limited impact on purchase intentions, regardless of familiarity with the brand, although;
- When consumers have a low-level of environmental concern, the absence of a seal leads them to evaluate the familiar brand more favorably than the unfamiliar brand.
- When a consumer has a high-level of environmental concern, eco-seals in general generate more favorable purchase intentions for familiar brands, although eco-seals with an ambiguous source generate less favorable purchase intentions for unfamiliar brands, and perhaps most surprising;
- High-concern consumers are more likely to respond favorably to eco-seals generated by the manufacturer, as opposed to an independent source such as the government, suggesting that familiar-brand seals boost these consumers’ beliefs about a company’s concern for the environment.
As a whole, the study data points to numerous specific strategies for marketers and policy makers about the most effective use of eco-seals and message strategies for various easily-identifiable target audiences.
See a recent profile of this research at the Wall Street Journal blog, “Corporate Intelligence.”
Banner photo courtesy of flickr user Pylon757.
In their recent article “Financial Literacy 101,” offering experts’ top recommendations for novice investors, The Wall Street Journal spotlighted Risk Less and Prosper by Boston University’s Zvi Bodie, the Norman and Adele Barron Professor of Management, and co-author Rachelle Taqqu:
With its focus on goal-based investing, this book offers concrete steps to help beginning investors detail their specific needs and wants for the future, and to invest based on those goals.
Zvi Bodie, a management professor at Boston University, advises investors to take on risk only with money they can afford to lose. For the rest, he recommends specific inflation-indexed government bonds.
“Stocks can be a winning strategy, but they can also bring tragedy, and Bodie carefully sets out the risks and rewards of the alternatives,” says Dallas Salisbury, chief executive of the Employee Benefit Research Institute, a nonprofit think tank.