Category: Honors & Awards
A Three-Year Term with the Managerial and Organizational Cognition Division
Boston University School of Management’s Michelle Barton, assistant professor of organizational behavior, has been elected Representative-at-Large for the Managerial and Organizational Cognition Division (MOC) of the Academy of Management (AoM). The MOC is one of 24 divisions in the AoM, the nation’s oldest and largest scholarly management association.
The MOC’s domain is to research how members of organizations model reality to make sense of the world around them, and how such models interact with behaviors, affecting the way people organize and interact with one another. Study topics include attention, attribution, decision making, ideology, information processing, learning, memory, mental representations and images, perceptual and interpretive processes, social construction, and symbols.
Research Spotlight: Barton, M.A. & Sutcliffe, K., (2010). Learning when to stop momentum, MIT Sloan Management Review, 51 (3), 69-76. Academy of Management Finalist for Outstanding Practitioner-Oriented Publication in OB.
In addition to serving with the other officers to manage general MOC business, Barton will oversee the Cognition in the Rough Professional Development Workshop (PDW) at the Academy of Management annual meeting. This workshop provides an opportunity for junior and senior scholars to discuss their early stage research papers in a roundtable setting, facilitated by experienced scholars—often editors of top journals—who give feedback and facilitate peer response, particularly on theoretical models and planned methodology.
Barton’s own research considers how individuals and groups organize to manage uncertainty in real time. Drawing from a variety of empirical settings, including wildland fire-fighting and high tech entrepreneurship, Barton focuses on the social and cognitive processes that affect organizational members’ awareness and interpretation of unfolding events and their capacity for flexible and adaptive response.
“PDW feedback has been instrumental in helping scholars further develop their research for publication in top academic journals.” – Academy of Management
Her work bridges the domains of crisis management, organizational learning, and technology innovation, and has been published in a variety of outlets including Human Relations, MIT Sloan Management Review, the Best Paper Proceedings of Academy of Management, and several edited collections. She has been an active member of the MOC division for the past eight years, presenting her own work as well as organizing symposia and professional development workshops.
Barton earned her PhD in Management & Organizations from the University of Michigan.
BU’s James Rebitzer co-authors “Unhealthy Insurance Markets”
Shares Ken Arrow Award for Paper in American Economic Review
James Rebitzer’s “Unhealthy Insurance Markets: Search Frictions and the Cost and Quality of Health Insurance” has received the 2012 Ken Arrow Award for Best Paper in Health Economics from the International Health Economics Association (iHEA).
Rebitzer is Boston University School of Management Professor of Economics and Public Policy; Everett W. Lord Distinguished Faculty Scholar; and Chair, Markets, Public Policy & Law Department. He co-authored the winning study, which appeared in the August 2011 American Economic Review, with Professors Randall Cebul (Case Western Reserve School of Medicine and Center for Health Care Research and Policy), Lowell Taylor (The Heinz College, Carnegie Mellon University), and Mark Votruba (Center for Health Care Research and Policy and Department of Economics, Weatherhead School of Management, Case Western Reserve University).
“The paper [is] a clear and compelling presentation of important empirical results with implications for current policy…very important and very current.” –Professor Tom Getzen, iHEA Executive Director
In praising the article’s import, iHEA Executive Director Tom Getzen notes, “The paper [is] a clear and compelling presentation of important empirical results with implications for current policy…very important and very current.”
“Unhealthy Insurance Markets” is the first study to estimate the magnitude of search frictions—inefficiencies and heightened administrative costs that stem from employers’ difficulties choosing wisely or easily among the insurance market’s complex and profuse products.
Frictions increase insurance premiums and increase insurance turnover, reducing incentives on the part of insurers to invest in the future health of their policy holders.
The paper analyzes the effects of search frictions on the functioning of health insurance markets, with a focus on the fully insured market. Larger employers can avoid many of the costs associated with search frictions, since they can afford to “self insure,” or hire insurers to administer their plans for them, the authors note. But “smaller and less sophisticated firms generally do not self insure. Instead, they purchase products that provide both administrative services and insurance.” These are “fully insured” firms, and they comprise approximately half the entire US insurance market.
Rebitzer et al show that “frictions increase insurance premiums (enough to transfer 13.2 percent of consumer surplus from fully insured employer groups to insurers—approximately $34.4 billion in 1997) and increase insurance turnover (by 64 percent for the average policy),” thereby reducing incentives on the part of insurers to invest in the future health of their policy holders.
They also explore the publicly financed insurance option, finding that it can improve the efficiency of private insurance markets by reducing search-friction-induced distortions in pricing and marketing efforts. They argue,
“These improvements stem from the fact that a moderately priced public option can displace the relatively small number of insurance policies located on the far right tail of the distribution of premiums. Eliminating this tail has a ripple effect that reduces prices throughout the rest of the market, scales back the incentives that lead to excessive marketing costs, and reduces policy turnover….Our analysis of frictions further suggests that an effective public option would be a simple, well-marketed, and subsidized backstop policy that employers can choose if they don’t find something they like better.”
Since health reform is among the foremost policy and political issues in the United States today, “a better understanding of the causes and consequences of search frictions” is crucial, Rebitzer and his co-authors urge, “for formulating better policy and improving the efficiency of insurance markets.”
Hsu Dissertation Honored by Marketing Science Institute
Product recalls: companies hate them; customers get annoyed by them. But how companies handle them makes all the difference in the world.
Liwu Hsu (PhD’12), who will defend his dissertation this spring, won a prestigious honorable mention in the 2011 Alden G. Clayton Doctoral Dissertation Proposal Competition for his dissertation “Can Online Chatter Kill a Giant? Insights into the Role of Brand Equity and Social Media during a Product Recall Crisis.”
According to his doctoral advisor, Professor Shuba Srinivasan, “From 80 submitted papers, 168 marketing scholars selected one winner and four honorable mentions. It’s a great honor for Liwu and the department.” The annual award is given by the Marketing Science Institute. Hsu will begin as an assistant professor at the University of Alabama at Huntsville College of Business Administration in Fall 2012.
In his study, Hsu looks at how social media can help or hurt a company’s shareholder value in a product recall crisis situation and provides insight into the potential moderators of brand equity. This study builds on brand research previously published by Professor Susan Fournier, one of his doctoral committee members.
In the event of a product recall, when a company denies a problem or even hesitates to acknowledge a rumor of recall, social media gives consumers the power to tarnish a company’s reputation, increasing investors’ concern about future company cash flows. Investors fear the initial costs of product recall and replacement, potential lawsuits, and potential new regulations, and stock value and reputation can take a big hit (even if it’s temporary).
A big brand company can’t readily hide its faults and provide an insurance-like protection of shareholder value. Company denials get countered by user stories and blogs spread the word. That in turn generates more criticism, and generates more ill will. “Negative buzz spreads quickly via social media,” says Hsu, “and worse still, social media enables and encourages consumers to be more critical of companies and their brands. Moreover, it is increasingly difficult for a company to bury or hide from its mistakes on the web.”
Hsu recommends that in a PR crisis, the CEO should respond proactively. Immediate solutions include creating a post, perhaps a video, to air out the problem, and the company’s solution, immediately. “Share information efficiently, completely, and directly with consumers,” he says. In recent years, Hsu explains, marketing dollars have increasingly shifted from traditional communication vehicles towards the Web 2.0 platform. Companies are learning that it is important to be continually communicating online, keeping the channels open for when the need arises.
Recent business scandals demonstrate that it’s better to acknowledge a negative event quickly, admit fault, and then move on. The Internet assures that bad secrets never stay hidden for long.