Category: Academic Departments
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.
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.