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Selected Colloquia Events are open to the public; to attend events open to the public, please contact:
The Research Colloquium provides a forum for interaction among faculty, students, and visitors interested in the applications of business and management. The colloquium includes presentations by faculty from UC Irvine and other universities, as well as research institutes.
Selected Colloquia Events are open to the public; please see event description for more details about event availability.
Academic Area: Organization and Management This event is: Open to the Public
3:30 PM - 5:00 PM , SB 223 Speaker: Professor Barbara Lawrence University: University of California, Los AngelesAbstract: Why does it take so long to increase the proportion of women in leadership positions and what strategies accelerate this process? Increasing the proportion of women in leadership positions is an enduring organizational problem. Managers in public and private organizations have tried many tactics but progress is slow. The talk will report begins with a presentation of actual demographic data from a large organization, and then the results of a simulation testing the micro-dynamics of hiring, retention and promotion decisions, allowing us to explore which theories best explain this slow progress and which organizational interventions produce the most effective change. The simulation addresses three intellectual gaps. First, most studies on women’s advancement examine discrete explanations, such as receiving insufficient mentoring, rather than studying incremental change. This may be a significant omission because the accumulation of disadvantage, the large negative effects of small gender differences collecting over time, plays an important role in impeding women’s career success (Valian, 1999, p. 401). Second, studies typically examine advancement as resulting either from individual differences, such as family concerns and risk-taking, or from organizational attributes, such as human resource policies and organizational culture. Yet careers are inherently multi-level phenomena (Arthur, Hall, & Lawrence, 1989a; Lawrence & Tolbert, 2007) and research involving more than one level is limited (Arthur, Khapova, & Wilderom, 2005). Third, and consistent with both previous gaps, most computational simulations of organizations model only individual-level behaviors, which may be too simple for realistic organization-level predictions. We address this gap by developing tools to test the connection between emergent properties and expected theory. The research can provide a tool for educational institutions, government agencies and private organizations to assess the cost-benefit tradeoffs of human resource policies that influence women’s careers. Understanding these tradeoffs across multiple levels of analysis—individual actions, group dynamics, organizational strategies and societal factors—will help identify policies that benefit both individuals and society. The immediate beneficiaries are working women in careers with advancement opportunities.
Academic Area: Operations & Decision Technologies This event is: Open to the Public
3:00 PM - 5:00 PM , SB 111
3:30 PM - 5:00 PM , SB 111 Speaker: Professor Stephen GilbertUniversity: University of Texas at AustinAbstract: Many durable products cannot be used without a contingent consumable product, e.g. printers require ink, iPods require songs, razors require blades, etc. For such products, manufacturers may be able to lock-in consumers by making their products incompatible with consumables that are produced by other firms. We examine the effectiveness of such a strategy in the presence of strategic consumers who anticipate the future prices of both the durable product and the contingent consumable. On the one hand, by locking-in consumers to its own contingent consumable, a durable goods manufacturer can dampen its own incentive to reduce durables prices over time, thereby mitigating the classic time inconsistency problem. On the other hand, lock-in will also create a hold-up issue and will adversely affect consumers’ expectations of future prices for the contingent consumable. We demonstrate the trade-off between these two issues, time inconsistency and hold-up, and derive analytical results that provide insights about the conditions under which a lock-in strategy can be effective.
11:30 AM - 1:00 PM , SB 117 Speaker: Professor Margaret ShihUniversity: University of California, Los AngelesAbstract: People carry multiple social identities simultaneously. For instance, an Asian American Woman can be simultaneously identified by her ethnicity (i.e. Asian), nationality (i.e. American) or gender (i.e. female). Each of these identities are associated with a different set of expectations or stereotypes. Priming different identities can make different stereotypes salient. The talk will present a series of studies examining the effects of identity primes on different outcomes.
Academic Area: Marketing This event is: Open to the Public
3:30 PM - 5:00 PM , SB 117 Speaker: Professor Ajay Kohli University: Georgia Institute of TechnologyAbstract: The vitality of a discipline is reflected in the vibrancy and quality of its theories that explain and predict phenomena of interest. This research makes two main contributions. First, it clarifies the structure of a theory as comprised of three core components. This reveals the commonalities between analytically-derived versus inductively-derived theories. More importantly, it develops three general structures of arguments that can be used to support three different types of propositions (main effects, interaction effects, and non-linear effects). An understanding of the general structure of arguments clarifies the dilemmas confronting a scholar developing new theoretical propositions, and how they can be addressed. Second, this research clarifies the iterative inductive-deductive process by which a theory is constructed, and the characteristics of a theory that influence its impact. Based on this, it identifies ways in which a scholar can engage in the process in order to generate more impactful theories. Finally, it identifies “side actions” scholars can take in course of theory construction in order to generate more insightful and impactful theories.
3:30 PM - 5:00 PM , SB 116 Speaker: Professor Barbara Lawrence University: University of California, Los AngelesAbstract: Why does it take so long to increase the proportion of women in leadership positions and what strategies accelerate this process? Increasing the proportion of women in leadership positions is an enduring organizational problem. Managers in public and private organizations have tried many tactics but progress is slow. The talk will report begins with a presentation of actual demographic data from a large organization, and then the results of a simulation testing the micro-dynamics of hiring, retention and promotion decisions, allowing us to explore which theories best explain this slow progress and which organizational interventions produce the most effective change. The simulation addresses three intellectual gaps. First, most studies on women’s advancement examine discrete explanations, such as receiving insufficient mentoring, rather than studying incremental change. This may be a significant omission because the accumulation of disadvantage, the large negative effects of small gender differences collecting over time, plays an important role in impeding women’s career success (Valian, 1999, p. 401). Second, studies typically examine advancement as resulting either from individual differences, such as family concerns and risk-taking, or from organizational attributes, such as human resource policies and organizational culture. Yet careers are inherently multi-level phenomena (Arthur, Hall, & Lawrence, 1989a; Lawrence & Tolbert, 2007) and research involving more than one level is limited (Arthur, Khapova, & Wilderom, 2005). Third, and consistent with both previous gaps, most computational simulations of organizations model only individual-level behaviors, which may be too simple for realistic organization-level predictions. We address this gap by developing tools to test the connection between emergent properties and expected theory. The research can provide a tool for educational institutions, government agencies and private organizations to assess the cost-benefit tradeoffs of human resource policies that influence women’s careers. Understanding these tradeoffs across multiple levels of analysis—individual actions, group dynamics, organizational strategies and societal factors—will help identify policies that benefit both individuals and society. The immediate beneficiaries are working women in careers with advancement opportunities.
Academic Area: Accounting This event is: Open to the Public
10:30 AM - 12:00 AM , SB 306 Speaker: Mingyi HungUniversity: University of Southern CaliforniaAbstract: This paper documents the use of accounting-based covenants worldwide and examines its impact on the role of accounting conservatism in mitigating debtholder-stockholder conflicts. Using a relatively new database on global loan contracts, we find that financial covenant intensity (i.e., the intensity of accounting-based covenants) is related to country-level legal enforcement and financial reporting quality, but not the importance of debt markets. In addition, we find that while on average there is a positive association between conservatism and debtholder-stockholder conflicts around the world, this association increases with financial covenant intensity and is significant only in countries with a relatively high intensity of financial covenants. Finally, we find that the cost of debt is negatively associated with the debt contracting component of conservatism, but not the other component. Overall, our study contributes to the literature by being the first to directly document the effect of accounting-based covenants on the use of conservatism in mitigating debtholder-stockholder conflicts and the pricing consequence, thereby providing a comprehensive picture on the demand for accounting conservatism in debt contracting.
10:30 AM - 12:00 AM , SB 306 Speaker: Professor Christine PetrovitsUniversity: New York UniversityAbstract: This study examines the causes and consequences of internal control deficiencies in the nonprofit sector using a sample of 6,572 public charities from 1999 to 2003. We first document that the likelihood of reporting an internal control problem increases for nonprofit organizations which are smaller and in poor financial health. We then present evidence that weak internal controls over financial reporting have a significant negative effect on the amount of subsequent public support received after controlling for the current level of public support and other factors influencing donations. Our results suggest that donors, an important source of capital for nonprofit organizations, react either directly or indirectly to internal control information.
Academic Area: Information Systems This event is: Open to the Public
10:00 AM - 11:30 AM , SB 112 Speakers: Professor Ramnath ChellappaUniversity: Emory UniversityAbstract: Digitization is believed to have transformed the music industry like no others before. While a number of theories have been put forward with regards to the diminishing role of record labels and to the “long tail” nature of sales due to online distribution, there is little empirical evidence that is forthcoming. Our empirical analyses reveal several interesting insights some of which are counter to popularly held beliefs. Further, while an important measure of success has been an album or digital track’s appearance in the Billboard charts, our research seeks to examine the significance of this ranking through an empirical analysis of sales-rank relationship in this industry. Using a dataset which features rank and sales information on the albums and digital tracks that appear in the Billboard Top 200 and Hot Digital Tracks charts, we estimate the shape parameter of this relationship at a weekly level. Our results not only show the clear emergence of a Pareto distribution within just the top 200 titles, but we also find strong temporal variations in this parameter, particularly for album rankings. We explain these temporal variations by changes in the competitive landscape and number of consumers in the marketplace. Our results not only have significant implications for information systems research that employ the sales-rank relationship to infer sales, but also to significance of rankings themselves.
Academic Area: Operations & Decision Technologies This event is: Merage School Only
2:00 PM - 3:30 PM , SB 116 Speaker: Kiran PanchamgamUniversity: University of MarylandAbstract:Many retailers sell seasonal goods through multiple distribution channels. While product portfolios can vary across these channels, it is also the case that the excess inventory of products that were ordered from the suppliers to be sold at a “primary” market (e.g. Department stores) are transferred to the “secondary” markets (e.g. outlets, online stores) and offered for sale at a discounted price. In the first part of the paper, we investigate a retailer’s logistics decisions, which include the time to move a good from a primary to a secondary market, in addition to the amount to order prior to the start of the season. We formulate a stylized model with retailer facing uncertain market states, each state defined by a random demand process. In the second part of this paper we study the effect of risk-sharing mechanisms on retail operations in such a setting. Specifically, we study the effect of Buyback and Markdown-Money contracts on retailer’s and supplier’s operational decisions like ordering, timing and pricing decisions. We analytically derive the optimal policy and thus compare the retailer and supplier optimal decisions to a setting with no risk-sharing mechanism (e.g. Wholesale-Price contract). Finally, we conduct extensive numerical experiments and perform sensitivity analysis to complement the analytical results. We conclude with the preference of these risk-sharing mechanisms for the supply chain and the parties involved.
3:00 PM - 4:30 PM , SB 117 Speaker: Professor Sandra RobinsonUniversity: University of British Columbia, Sauder School of BusinessAbstract: My research to date has focused primarily on the ‘dark side’ of organizational relationships, often through the lens of employees’ perceptions. As such, my work has addressed phenomena such as psychological contract breach, violation, workplace deviance, aggression, and territorial infringement.My most recent research within this stream addresses ostracism in the workplace; that is, employees’ perceptions of being excluded or ignored by others at work. At my talk, I will be sharing some of my thoughts around the nature and impact of ostracism, and I will present the preliminary results of two studies on ostracism in the workplace.The first study examines ostracized employees’ causal attributions regarding their ostracism. I will present results of a content analysis of employees’ explanations for why they are ostracized, and discuss the potential implications and insights we can draw from them. In addition, I will show how the nature of attributions moderates the relationship between ostracism and emotional distress. The second study is a field survey looking at the impact of ostracism on sense of belonging and work contributions. I will present findings showing that ostracism explains unique variance in sense of belonging and work contributions, beyond that explained by other forms of negative social experiences. In addition, I will show that the relationship between ostracism and contributions is mediated by sense of belonging, and moderated by the degree to which employees’ belonging needs are met outside of work.
2:00 PM - 3:30 PM , SB 111 Speaker: Professor Xiao (Hedy) HuangUniversity: University of Southern CaliforniaAbstract: We study a newsvendor game with transshipments, in which n retailers face a stochastic demand for an identical product. Before the demand is realized, each retailer independently orders her initial inventory. After the demand is realized, the retailers select an optimal transshipment pattern and ship residual inventories in order to meet residual demands. Unsold inventories are salvaged at the end of the period. We compare two methods for distribution of residual profit -- transshipment prices (TP) and dual allocations (DA) -- that were previously analyzed in literature. Transshipment prices are selected a priori, before the demand is known, while dual allocations, which are obtained by calculating the dual prices for the transshipment problem, are calculated ex post, after observing the true demand. We first study the conditions for the existence of the Nash equilibria under DA, and then compare the performance of the two methods and show that neither allocation method dominates the other. Our analysis suggests that DA may yield higher efficiency among ``more asymmetric'' retailers, while TP work better with the retailers who are ``more alike'', but the difference in profits does not seem significant. We also link expected dual prices to TP, and use those results to develop heuristics for TP with more than two symmetric retailers. For general instances with more than two asymmetric retailers, we propose a TP agreement which uses a neutral central depot to coordinate the transshipments (TPND). While DA in general outperform TPND in our numerical simulations, its ease of implementation makes TPND an attractive alternative to DA when the efficiency losses are not significant (e.g., high critical fractiles or lower demand variances).
1:30 PM - 3:00 PM , SB 111 Speakers: Leslie EldenburgUniversity: University of Arizona, Eller College of ManagementAbstract: We examine the effects of profit-based compensation on nonprofit objectives. Many nonprofit activities, such as providing free care for the poor, decrease profits. Therefore, when nonprofit organizations emphasize profitability in top management compensation contracts, a tension arises between focusing on profit versus nonprofit objectives. We discuss factors that might lead nonprofit managers to focus on both profit and nonprofit objectives. Using a sample of nonprofit hospitals, we find that in the short-term when profits and nonprofit expenditures are in conflict, profit-based incentives are associated with lower performance related to nonprofit activities (charity care and nursing hours). However, over the long-term, we find that profit-based compensation is positively associated with hospital performance related to nonprofit activities (charity care, breadth of hospital services, nursing hours per patient day, and newer hospital equipment). We conclude that nonprofit managers with strong profit based incentives tend to reduce nonprofit activities in the short-term when profits are low. However, in the long-term they perform better on both profit and nonprofit dimensions.
9:30 AM - 11:00 AM , SB 112 Speakers: Kin LoUniversity: University of British Columbia, Sauder School of BusinessAbstract: We examine three related issues on the impact of seasonal affective disorder (SAD) on financial markets. First, we hypothesize and find that analysts are more pessimistic in the fall season, as indicated by their earnings forecasts and forecast revisions. Second, we show that equity returns fail to anticipate the downward impact of SAD on forecast revisions. Finally, we find that firms with analyst revisions in the fall experience less negative abnormal returns during the fall, compared with those without analyst revisions. Overall, the evidence suggests that both analysts and equity investors are affected by SAD, but forecasts by analysts helps to mitigate the depressing effects of SAD.
3:30 PM - 5:00 PM , SB 112 Speaker: Professor Ganesh IyerUniversity: Haas School of Business, UC BerkeleyAbstract: We study information transmission to a decision maker from an advisor who values a reputation for incorruptibility in the presence of a third party who offers unobservable payments/bribes. While it is common to ascribe negative effects to such bribes, we show that given reputational concerns, bribes can play a positive role by restoring truthful communication that would otherwise not occur. Thus while bribes can influence bad advisors who are self interested to lie about the unfavorable state, they can also be used to motivate good advisors who care more about the decision maker’s utility to truthfully report the favorable state.
3:30 PM - 5:00 PM , SB 306 Speaker: Professor Jeffrey Sanchez-BurksUniversity: Stephen M. Ross School of Business, University of MichiganAbstract: Just over a century ago, the psychologist Joyce (1898) proposed that invention consists of creating new and useful ideas from existing ideas. Studies of organizational and industry level innovation support this notion. Missing, however, is an in-depth understanding of how individuals come up with innovative ideas through the recombination of knowledge they already possess. In this research, we reveal an analog to macro-level innovation processes that unfold at the individual level. I'll present evidence from two experiments that suggest that individuals who have high levels of identity integration, or perceptions of incompatibility between seemingly conflicting sets of knowledge structures, are more innovative. I'll discuss additional ongoing studies that reveal emotional and contextual factors that facilitate this identity-creativity link.
Academic Area: Finance This event is: Open to the Public
10:30 AM - 12:00 AM , SB 122 Speaker: Han KimUniversity: University of Michigan, Ross School of BusinessAbstract: We find a hump shaped relation between Tobin’s Q and CEO share ownership, but only when external pressure for good governance is weak, where the pressure is measured by product market competition and institutional ownership concentration. When external governance is strong, by contrast, CEO share ownership is unrelated to Tobin’s Q. These results are robust to firm or CEO-firm pair fixed effects, alternative definitions of key variables, different statistical properties between strong and weak external governance regimes, founder effects, reverse causality, and other endogeneity issues. The hump shaped relation appears to be a manifestation of some CEOs capturing incentive contracts under weak external governance, while no relation under strong external governance is consistent with the contracting view that CEO ownership is a component of equilibrium contracts.
2:00 PM - 3:30 PM , SB 116 Speaker: Professor Les FouldsUniversity: Universidade Federal de Goias, BrazilAbstract: We shall discuss a particular vehicle scheduling scenario concerning the operation of public library bookmobiles. We shall compare and contrast two solution approaches to this scenario. The first is the more formal modeling and optimization approach of operations research and the second is decision support construction. The general significance of the two approaches and how a combination of them can be usefully applied to such challenges will also be summarized.
4:00 PM - 5:30 PM , SB 223 Speaker: Professor Elodie GoodmanUniversity: University of IllinoisAbstract: In the first part of the talk, we study competition in a supply chain where multiple manufacturers compete to supply a set of products to multiple risk-averse retailers who compete to satisfy the uncertain consumer demand. We find that for the symmetric supply chain, the efficiency (the ratio of the aggregate utility in the decentralized and centralized chains) depends on the number of manufacturers and retailers and on the degree of retailer differentiation, but is independent of the degree of product differentiation and the retailer risk aversion. We also study (numerically) the asymmetric supply chain, and we find that the efficiency of the decentralized chain drops sharply with the asymmetry of either manufacturers or retailers. Finally, we show how revenue-sharing contracts can be used to coordinate the decentralized symmetric chain and recover the same aggregate utility as in the centralized chain.In the second part of the talk, we address inventory stockpiling decisions in a network of hospitals in preparation for an influenza pandemic. We consider hospitals that have mutual aid agreements in place regarding the sharing of resources during medical emergencies such as a pandemic. We present several models for determining the stockpile level at each hospital in a game theoretical framework, investigate the existence and uniqueness of a Nash equilibrium, and introduce solution algorithms for computing the equilibrium.
Academic Area: Strategy This event is: Open to the Public
3:00 PM - 4:30 PM , SB 306 Speaker: Professor Peer FissUniversity: University of Southern CaliforniaAbstract: Typologies are an important way of organizing the complex cause-effect relationships that are key building blocks of the strategy and organization literatures. In this study, I develop a novel theoretical perspective of causal centrality and periphery based on how elements of a configuration are connected to outcomes. Using recent data on high-technology firms, I empirically investigate configurations based on the Miles & Snow typology using fuzzy set Qualitative Comparative Analysis. My findings show how this theoretical perspective allows for a detailed analysis of causal centrality and asymmetry, shifting the focus to mid-range theories of causal processes in typologies.
3:30 PM - 5:00 PM , SB 223 Speaker: Professor Ulrike MalmendierUniversity: University of California, BerkeleyAbstract: Why do security analysts issue overly positive recommendations? One explanation is that analysts pick their favorite stocks and are truly too optimistic. An alternative explanation is that analysts distort recommendations to maximize trade commissions and underwriting business, particularly if affiliated with an underwriter. We use a novel approach to assess the relative importance of both explanations, exploiting the concurrent issuance of recommendations and earnings forecasts. We first show that small traders follow recommendations but not forecast updates; large traders discount recommendations and follow forecasts. As a result, analysts with conflicting interests may distort recommendations upwards to trigger small-investor purchases and to please management, but may not distort forecasts. They may in fact distort forecasts downwards shortly before the announcement to allow management to beat the forecast. If analysts are, instead, truly too optimistic they should express their positive view both in recommendations and in forecasts. We find that affiliated analysts issue more optimistic recommendations but more pessimistic forecasts than unaffiliated analysts. Moreover, the affiliated analysts who have the most positive recommendations outstanding also give the most negative forecasts, consistent with heterogeneity in incentive distortion but not in optimism.
3:30 PM - 5:00 PM , SB 117 Speaker: Professor Roger EdelenUniversity: University of California, DavisAbstract: Part 1: We measure the relative sentiment of retail versus institutional investors by comparing their respective portfolio allocations to equity versus cash and fixed-income securities. Relative sentiment is uncorrelated with indicators of absolute investor sentiment and appears to have considerable value as a (contrarian) market timing tool at a quarterly frequency: High levels of relative retail sentiment are associated with significantly lower future excess equity returns, and the change in relative sentiment is strongly positively related to concurrent market returns. These results suggest that fluctuations in retail sentiment are a primary driver of equity valuations for reasons unrelated to fundamentals. While returns on retail portfolios are reduced by sentiment fluctuations, institutional investors enhance their returns by accommodating retail fluctuations with contrary shifts in their own allocations. Part 2:Very little is known about how mutual funds use soft dollars or their impact on fund returns. We examine several hypotheses regarding soft dollar use. Consistent with an information motive, funds with more active management pay higher soft dollar commissions, and this form of soft dollar payment is associated with higher return performance. However, the positive impact of information-motivated payments is more than offset by the negative impact of expense-shifting motivated payments – particularly in the case of distribution expenses. The lack of disclosure also appears to be accompanied by agency costs, in that, the impact of expense-shifting soft dollars on performance is more negative than hard dollars (expense ratio). We conclude that soft dollars are a complex payment mechanism involving tradeoffs between the benefits of research and the potential agency costs.
3:00 PM - 4:30 PM , SB 306 Speaker: Professor Joe PoracUniversity: New York UniversityAbstract: Strategy and organizations scholars have actively studied the effects of social status orderings on a variety of personal and organizational outcomes. For the most part, empirical research on status has been guided by the sociologist Robert Merton's suggestion forty years ago that there are positive returns to high status among social actors such that the "rich get richer" in social space. Merton labeled this result the "Matthew Effect" after a passage from the Bible's Book of Matthew. And, indeed, empirical research has tended to support the argument that high status actors do in fact get a greater slice of the pie. However, a subtle implication of Merton's analysis is that the Matthew Effect is inherently inequitable, and that as the rich get richer, the poor get frustrated. This latter reaction sets the stage for the possibility that high status actors are subject to a variety of retributive actions designed to redress status inequities. These "negative returns" to high status have been largely neglected by strategy and organizations scholars yet have a number of important implications for ambitious social actors seeking prestige and power. In this talk, we will explore the positive and negative returns to status in the context of a series of empirical results generated from a study of corporate CEOs and their top management teams over a five year period. We find that high status CEOs and their direct reports do benefit from their high status position, but also that they are held more accountable for corporate performance than less prestigious executives and suffer negative returns as a result. We will explore some of our empirical findings in this talk, and use them to develop a general approach to understanding the competing social pressures that accrue to CEOs when they become publicly acclaimed for their work.
11:00 AM - 12:30 AM , SB 306 Speaker: Professor Gregory WaymireUniversity: Emory University, Goizueta Business SchoolAbstract: We develop the hypothesis that culturally evolved accounting principles (e.g., Objectivity) have their roots in how the biologically evolved human brain evaluates the desirability of reciprocal exchange. Our analysis is communicated in two related parts. In Part I, we provide background on the structure and evolution of the brain, the measurement of brain activity during economic decision-making using neuroscientific methods, and the brain’s central role in building economic institutions. In the second essay, Part II, we describe the emergence of modern accounting principles and review the neuroscientific evidence suggesting a mapping from brain function to the principles of modern accounting. The primary function of accounting in evaluating exchange is providing information on the net benefits of past exchanges. Accounting’s comparative advantage arises because it provides information based on reliable quantified data that is well suited to multi-period settings where reputation and trust are of first-order importance. We review evidence documented by neuroscientists that is consistent with the hypothesis that longstanding accounting principles such as Revenue Realization, Expense Matching, Objectivity, Historical Cost, Going Concern and Conservatism have distinct parallels in brain behaviors.
12:00 PM - 1:30 PM , SB 112 Speaker: Professor David MayerUniversity: University of Central Florida, College of Business AdministrationAbstract: There is little controversy regarding the value and importance of reducing unethical behavior and increasing prosocial behavior in organizations. Interestingly, the layperson tends to attribute the actions of organizational actors to dispositional factors, believing that unethical behaviors in organizations are due to “bad apples” who are simply unethical people, and that some organizational members act in a prosocial manner because they are just “good eggs.” This research takes an alternative lens to understand unethical and prosocial behavior in organizations. Although individual differences do matter, this research demonstrates the underestimated power of the social context as a potent influence on unethical and prosocial behaviors in organizations. I briefly report on the findings from four papers (including seven field studies) that examine the role of the social context (e.g., top management, supervisors, and peers) on employees’ unethical and prosocial behavior. Each paper draws on established theories of social influence (e.g., social learning, social exchange, social information processing) to address a different question regarding the role of the social context.• The first paper asks: “Does ethical leadership matter and what types of leaders are ethical?” Results from two group-level field studies demonstrate relationships between supervisor ethical leadership and employees’ unethical behavior and conflict, and leader moral identity is found to be an antecedent of supervisory ethical leadership.• The second paper asks: “Does ethical tone at the top matter most?” Contrary to prevailing conventional wisdom, this group-level field study finds that the effects of top management ethical leadership on employee deviance and prosocial behavior is fully mediated through supervisor ethical leadership; suggesting that the effects of the ethical tone set by top management is only realized through supervisor ethical leadership.• The third paper asks: “When does ethical tone at the top matter and through what mechanisms?” The results of two large group-level field studies find that, consistent with social learning theory, the relationship between top management ethical leadership employees’ deviant and prosocial behavior is moderated by the amount of interaction employees have with top management; and this moderated relationship is mediated by coworker modeling of ethical behavior.• The fourth paper asks: “Do coworkers influence whether the ethical messages from management affect employees’ ethical behavior?” The results from two field studies demonstrate that the effects of top management and supervisor ethical leadership on whistle-blowing are stronger when coworkers support ethical behavior.As a set, these findings highlight the important role of the social context in organizations as an antecedent to employees’ unethical and prosocial behavior. Thus, although individual differences such as values and personality matter, these studies suggest that doing right or wrong in organizations is more than just a result of bad apples and good eggs.
3:30 PM - 5:00 PM , SB 117 Speaker: Professor Matthew SpiegelUniversity: Yale School of ManagementAbstract: This paper uses a general equilibrium model to examine an economy in which firm managers seek to maximize their individual firm’s value through the costly adjustment of their capital stock in response to economic shocks. These economic shocks impact both the number of capital units each firm has and how productive each unit is. The ultimate value of these corporate assets is determined by risk averse investors that trade in a competitive multiple security market. Because capital stocks change slowly over time, the relative return to owning them does as well. This generates both cross sectional and intertemporal return patterns in which economic shocks lead to large returns, followed by what appear to be long term abnormal returns in the other direction.
3:30 PM - 5:00 PM , SB 116 Speaker: Professor Scott FayUniversity: Syracuse UniversityAbstract: We define and develop a new pricing tool, termed, "probabilistic selling." Using this tool, a seller creates a "probabilistic good," which is not a concrete good but is an offer involving a probability of getting any one of a set of multiple distinct items, and offers such probabilistic goods to potential buyers as additional purchase choices. For example, a retailer selling two different colors of sweaters, red and green, may offer an additional "probabilistic sweater," which can be either the red or green sweater. A theatre that offers two different shows on a given weekend can sell an additional probabilistic ticket, "Saturday or Sunday Performance." We show various advantages of this selling strategy, such as expanding one's market and enhancing segmentation. Our findings show that offering probabilistic goods is particularly valuable to service providers or retailers who face uncertain demand and limited capacity/supplies. PS has a large potential benefit for retailers because the retailing industry often faces uncertain demand across particular SKU's within a product group (e.g., handbags with different designs). In such environments, offering a probabilistic product can be a powerful tool for better margin management so that a retailer can induce earlier purchases, maintain the "full" price longer, and reduce the size of markdowns. Specifically, PS can be used as a pre-emptive tool, i.e., preventing inventory imbalance from occurring, as well as a responsive tool, i.e., correcting existing inventory imbalances. Understanding this new tool is timely because recent advances in technology are creating opportunities to implement probabilistic selling efficiently.
3:30 PM - 5:00 PM , SB 117 Speaker: Professor Olav SorensonUniversity: University of Toronto, Rotman School of Management Abstract: In the United States, the Motion Picture Association of America (MPAA) classifies films according to content to provide consumers, primarily parents, with guidance as to whether they would find the material offensive. But do these rating categories reallyreflect only the content of the film? Independent filmmakers have often complained thatthe system seems stacked against them. We find that, conditional on a given level ofcontent, films distributed by MPAA members and other larger distributors, and those thatinvolve more central producers and directors receive more lenient classifications. Wediscuss which mechanisms might account for this effect. Regardless of the mechanism,however, since ratings influence film revenue (and consequently profitability), the moviecertification system in the United States appears to place smaller distributors andperipheral individuals at a disadvantage relative to their larger and more central rivals.
3:30 PM - 5:00 PM , SB 117 Speaker: Olav SorensonUniversity: University of TorontoRotman School of ManagementAbstract: To Follow
3:30 PM - 5:00 PM , SB 223 Speaker: Professor Anjan ThakorUniversity: Washington University, Olin School of BusinessAbstract: This paper examines capital budgeting and dividend policy in an environment in which firms need to raise equity financing from new investors to fund projects, and different generations of shareholders may openly disagree over what maximizes value. The standard value maximization objective is incomplete in this setting. I show that the manager’s objective should be to maximize his expectation of the net present value accruing to the current shareholders, thereby attending to the dilution of these shareholders’ claims when equity is sold to new investors. This framework, which isolates the effect of disagreement by abstracting from both agency and symmetric information problems, generates numerous implications. First, the hurdle rates firms use for project acceptance/rejection decisions will always be higher than the expected rate of return shareholders demand based on asset pricing models. These hurdle rates will vary across firms so that one firm may accept a project that another firm rejects even though shareholders in both firms demand the same expected return. Second, despite the absence of agency or asymmetric information problems, the manager faces “disagreement costs,” represented by the difference between the firm’s hurdle rate and shareholders’ expected return. The disagreement costs are increasing and convex in the likelihood of disagreement between existing and new shareholders, and affect the firm’s investment policy. Third, the firm’s dividend policy can be used to optimize the allocation of control over investment policy between the manager/existing shareholders on the one hand and the new shareholders on the other, thereby lowering disagreement costs and the capital budgeting hurdle rate, and allowing the manager to achieve a Pareto superior outcome. That is, dividend and investment policies are inseparable.
3:00 PM - 4:30 PM , SB 306 Speaker: Professor John HaleblianUniversity: University of California, RiversideAbstract: We examine two key drivers of acquisition premiums—current growth levels and prior growth practices—to assess whether some acquirers are more motivated to acquire than others. We predict that managers experiencing low organic growth will be so motivated to grow the firm that they will pay high premiums for their acquired targets. We also hypothesize that managers depending on acquisitions for growth are prone to undermine their firm’s ability to grow organically, which results in higher acquisition premiums. In addition, we assess whether a firm’s own experience, as well as the experience of its advisors, mitigates the influence of low growth and acquisition dependence so that firms with more access to relevant acquisition experience pay less for targets. Our results are consistent with the notion that growth patterns in the form of low firm growth and a reliance on acquisition for growth increase acquisition premiums for targets. In addition, high levels of advisor acquisition experience lessen these effects on premiums, while acquirer acquisition experience sometimes interacts with advisor experience to further decrease premium price.
10:00 AM - 11:30 AM , SB 116 Speaker: Professor Rahul TelangUniversity: Carnegie Mellon University, H. John Heinz III School of Public Policy and ManagementAbstract: With the rise of Napster, BitTorrent, and other tools facilitating Internet piracy, rights holders have been forced to develop strategies to mitigate the impact of piracy on sales. These tools fall into three general categories: litigation, countermeasures, and competing through digital distribution. The literature has addressed the effectiveness of the first two anti-piracy strategies. In this paper we study the effect of legal digital distribution on piracy, using the removal of NBC content from Apple's iTunes store in December 2007, and its restoration in September 2008, as natural shocks to the supply of legitimate digital content.To address the question we use two large datasets from Mininova and Amazon.com documenting the levels of piracy and DVD sales for both NBC and other major networks' content around these events. We analyze this data in a difference-in-difference model and find that NBC's decision to remove its content from iTunes in December 2007 is causally associated with a 12% increase in the demand for pirated content. This is roughly equivalent to an increase of 55,500 downloads a day for NBC's content and is larger than the total legal purchases on iTunes for the same content in the period preceding the removal. We also find no change in piracy for the same content when it was restored to the iTunes store in September 2008. Finally, we see no change in demand for NBC's DVD content associated with NBC's closing or reopening of their digital distribution channel on iTunes.
Academic Area: Other This event is: Open to the Public
12:00 PM - 1:30 PM , SB 122 Speaker: Professor Yan GongUniversity: Paul Merage School of Business, University of California, IrvineAbstract: This paper explores how a new firm’s social structure shapes its migration to (or away from) improvisation in response to surprise, an event that was recognized by the firm as unexpected. I draw on theories of organizational learning and social network to predict that a focal firm’s pre-existing advisor network will influence its migration to or away from improvisation in response to surprises. Further, I predict that the two migration patterns will generate differential organizational outcomes. I use a sample of 153 surprise events derived from 1,725 page interview transcripts, over 1,000 page informant self-rating reports and rater assessments of these materials. Results provide evidence on impacts of advisor network on organizational movements around improvisation upon surprise events. Specifically, I find that different dimensions of an advisor network—types of advisors, advisor network involvement and advisor network experience—all influence a focal firm’s moving to or away from improvisation in the event of surprises. Results also show that moving away from improvisation leads to better organizational outcome of responding to a surprise event, compared to moving to improvisation. My study contributes to theories of improvisation, network learning, as well as entrepreneurship.
2:00 PM - 3:30 PM , SB 111 Speaker: Professor Steven PostrelUniversity: University of California, Los AngelesAbstract: Product planning is one of the most crucial and difficult strategic management tasks. Unlike in simple economic models where firms simply choose a product off a deterministic menu for a deterministic cost, real-world firms face a stochastic menu where product-development projects have probabilistic outcomes conditional on what is “ordered,” i.e. on what project goals are set. In a model with two product attributes assigned to separate teams, we characterize the optimal degree of “stretch” goal-setting on each dimension relative to a) the shape of customers’ preferences over attribute vectors, b) the firm’s perceived probability distribution of achieving different probability vectors, and c) the degree of the threat of imitative products from rivals. For “rectangular” customer preferences over attributes, we find an intuitive elasticity criterion defines the optimal degree of stretch. For “non-rectangular” preferences, we find that modular new-product development efforts face a feasibility-integration tradeoff: When customer preferences are “non-rectangular,” firms must balance the risk of a) having each module team meet its targets while the combined system fails against b) the risk that one or both module teams fails to meet its individual target. Non-modular project structures can circumvent this tradeoff but impose their own costs.
9:30 AM - 11:00 AM , SB 112 Speaker: Professor Anindya GhoseUniversity: Leonard N. Stern School of Business, New York UniversityAbstract: Spurred primarily by the quest for the monetization of user-generated content, the phenomenon of sponsored search advertising has now become the most predominant form of online advertising in the marketing world. However, we have little understanding of how consumers respond to sponsored search advertising on the Internet, how firms make decisions on bid prices for different keywords and how search engines decide in allocating the final ranks for these ad words. In this research, we will focus on two related questions: (i) How does sponsored search advertising affect consumer search and purchasing patterns on the Internet as well as advertiser bidding and search engine paid ranking decisions? (ii) What is the inter-relationship between natural search listings and sponsored search links for a given firm? Using a unique and unprecedented panel dataset collected from a Fortune 500 firm that advertises on Google, we empirically model the relationship between different metrics such as click-through rates, conversion rates, bid prices and keyword ranks. A Hierarchical Bayesian modeling framework is used and the models are estimated using Markov Chain Monte Carlo (MCMC) methods. We analyze how keyword-specific characteristics affect these metrics. We also investigate the value to firms from search-engine advertising by comparing the impact of organic listings on sponsored search and vice versa. By showing a direct negative relationship between conversion rates and rank, we show that the value per click to an advertiser is not uniform across slots. Our empirical findings also show a positive interdependence between organic and paid listings. This positive interdependence is asymmetric such that the effect of organic listings on paid is 3.5 times stronger than vice-versa. Furthermore, the results from these econometrics models are corroborated using various field experiments. Given the shift in online advertising from banner advertising to search engine based advertising, our results provides normative and quantitative guidelines to advertisers about what attributes of sponsored keyword advertisements contribute to variation in advertiser value, and how much to invest in search engine optimization campaigns versus search engine marketing campaigns. We conclude by discussing some findings that highlight the emerging relationship between user-generated content (such as in product review and blogs) and its monetization through sponsored search advertising.
1:00 PM - 2:30 PM , SB 306 SPEAKER: Professor Ashiq AliaUNIVERSITY: School of Management, University of Texas at DallasABSTRACT:Due to regulatory and contractual factors related to broad ratings, firms benefit (lose) more from an upgrade (downgrade) to a higher (lower) broad rating category (e.g. from A+ to AA-) as compared to an upgrade (downgrade) within a broad rating category (e.g. from A to A+) (Kisgen 2006). This paper shows that firms near a broad credit rating change, that is, a rating with a plus or minus specification, exhibit less conservatism in their reported earnings as compared to firms that are not near a broad credit rating change. Our results suggest that firms believe that by being less conservative in their reported earnings they can influence their credit rating by misleading the credit rating agencies into believing that the firms are more profitable than they actually are. Thus, our results shed light on the current debate on the ability of rating agencies to see through aggressive accounting practices. Our study also complements prior studies that show that firms with a history of reporting more conservatively obtain more favorable credit ratings. Our results suggest that in certain situations, like when near a broad rating change, firms may consider reporting less rather than more conservatively to obtain a more favorable credit rating.
3:30 PM - 5:00 PM , SB 223 Speaker: Professor Antti PetajistoUniversity: Yale School of ManagementAbstract: Standard Fama-French and Carhart models produce economically and statistically significant nonzero alphas even for passive benchmark indices such as the S&P 500 and Russell 2000. We find that these alphas primarily arise from the disproportionate weight the Fama-French factors place on small value stocks which have performed well, and from the CRSP value-weighted market index which is a downward-biased benchmark for U.S. stocks. We explore alternative ways to construct these factors and propose alternative models constructed from common and easily tradable benchmark indices. Such index-based models outperform the standard models both in terms of asset pricing tests and performance evaluation of mutual fund managers.
3:30 PM - 5:00 PM , SB 112 Speaker: David Glen MickUniversity: University of VirginiaMcIntire School of CommerceAbstract: The macromarketing system is largely the function of many micromarketing decisions made each day. But this connection has not been probed thoroughly in the macromarketing literature, and there is a need for conceptual frameworks that can successfully link the challenges of effective micromarketing with the laudable goals of the macromarketing field, which focuses on the interdependencies between marketing and society. To this end, we explore wisdom, the zenith of human virtues, through pertinent literature and in-depth interviews with executives nominated for their wise decision making. We discovered that wisdom in marketing is characterized by the recognition and management of five central paradoxes (e.g., the need for expertise versus the need to admit knowledge limitations; the need to enact authority and accountability versus the need for ego control). We discuss the implications of these findings for the theory, practice, and teaching of macromarketing, and for basic wisdom theory.
12:00 PM - 13:30 PM , SB 112 Don Beall Center for Innovation & EntrepreneurshipSCIENCE & ART OF INNOVATION EVENTSpeaker: Lori RosenkopfUniversity: The Wharton School of the University of PennsylvaniaAbstract: Organizational research advocates that firms balance exploration and exploitation yet acknowledges inherent challenges in reconciling these opposing activities. To overcome these challenges, such research suggests that firms establish organizational separation between exploring and exploiting units or engage in temporal separation whereby they oscillate between exploration and exploitation over time. Nevertheless, these approaches entail resource allocation tradeoffs and conflicting organizational routines, which may undermine organizational performance as firms seek to balance exploration and exploitation within a discrete field of organizational activity (i.e., domain). We posit that firms can overcome such impediments and enhance their performance if they explore in one domain while exploiting in another. Studying the alliance portfolios of software firms, we demonstrate that firms do not typically benefit from balancing exploration and exploitation within the function domain (technology versus marketing and production alliances) and structure domain (new versus prior partners). Nevertheless, firms that balance exploration and exploitation across these domains by engaging in R&D alliances while collaborating with their prior partners, or alternatively by forming marketing and production alliances while seeking new partners, gain in profits and market value. Moreover, we reveal that increases in firm size that exacerbate resource allocation tradeoffs and routine rigidity reinforce the benefits of balance across domains and the costs of balance within domains. Our domain separation approach offers new insights into how firms can benefit from balancing exploration and exploitation. What matters is not simply whether firms balance exploration and exploitation in their alliance formation decisions but the means by which they achieve such balance. Co-Authors: Dovev Lavie, Technion; Jingoo Kang, Wharton
10:30 AM - 12:00 AM , SB 306 Speaker: Thomas H. BrushUniversity: Purdue UniversityKrannert Graduate School of ManagementAbstract: Conventional wisdom suggests information technology (IT) reduces interfirm costs, leading to increased outsourcing. However, IT can reduce costs both within and between organizations, making the net influence of IT unclear (Varian, 2002). Using transactions and agency cost approaches, we consider the influence of IT on the outsourcing and centralization of HR services. Results from a survey of 243 firms indicate that IT facilitates outsourcing. We also find that centralization is positively related to outsourcing suggesting that centralization may be a precursor stage or a facilitator of outsourcing.
10:30 AM - 12:00 AM , SB 306 Speaker: Anne BeattyUniversity: Ohio State University Fisher College of BusinessAbstract: Previous research examining interest-rate risk management behavior assumes that firms voluntarily engage in derivative positions and ignores the fact that many lending banks contractually obligate borrowers to swap to fixed-rate debt. In this paper, we study 2,449 bank loans including 278 that require borrowing firms to enter interest rate swap agreements after loan origination and 147 where swaps are voluntarily used. Consistent with the use of covenants to reduce the agency costs of debt associated with borrower default risk, we find that loan contracts are more likely to include interest rate protection covenants when borrowers are smaller, less profitable, have higher leverage, and have lower credit ratings. We also find that borrowers are more likely to swap to fixed-rate debt when the yield curve is flat. However, the sensitivity of swap use to yield spread becomes insignificant after controlling for alternative macroeconomic indicators predicting recessions or for loan characteristics representing default risk, suggesting the “market-timing” explanation of the sensitivity of swap use to yield spread proposed in Faulkender (2005) is inappropriate for mandatory swap users. Finally, we find that banks charge lower interest rates on loans for mandatory swap users but not for voluntary swap users. Our paper provides the first large-sample evidence that credible commitment in hedging activities enhances credit quality.Co-Authors: Reining Chen and Haiwen (Helen) Zhang, Ohio State University
2:30 PM - 4:00 PM , SB 223 SPEAKER: Anthea (Yan) ZhangUNIVERSITY: Rice UniversityJesse H. Jones Graduate School of ManagementABSTRACT: Prior literature on foreign direct investment (FDI) spillovers has mainly focused on how the presence of FDI in an industry affects the productivity of domestic firms. In this study, we advance the literature by examining the effect of the diversity of FDI country origins on domestic firms in an emerging market. We propose that the diversity of FDI country origins in an industry can facilitate FDI spillovers and have a positive impact on the productivity of domestic firms in the industry. We also argue that this positive effect will be stronger when the technology gap between FDIs and domestic firms in an industry is larger and/or when domestic firms are larger. Using a panel data of Chinese manufacturing firms in 1998-2003, our results strongly support these arguments. *Co-Authors: Haiyang Li, Rice University; Yu Li, Peking University; Li-An Zhou Peking University
11:30 AM - 1:00 PM , SB 112 Speaker: R. Duane IrelandUniversity: Texas A&MMays Business SchoolAbstracts: CONCEPTUALIZING CORPORATE ENTREPRENEURSHIP STRAGEGY Our knowledge of corporate entrepreneurship (CE) continues to expand. However, this knowledge remains quite fragmented and non-cumulative. Herein, we conceptualize CE strategy as a useful focal point for integrating and synthesizing key elements within CE’s intellectual domain. The components of our CE strategy model include (1) the antecedents of CE strategy (i.e., individual entrepreneurial cognitions of the organization’s members and external environmental conditions that invite entrepreneurial activity), (2) the elements of CE strategy (i.e., top management’s entrepreneurial strategic vision for the firm, organizational architectures that encourage entrepreneurial processes and behavior, and the generic forms of entrepreneurial process that are reflected in entrepreneurial behavior), and (3) the outcomes of CE strategy (i.e., organizational outcomes resulting from entrepreneurial actions, including the development of competitive capability and strategic repositioning). We discuss how our model contributes to the CE literature, distinguish our model from prior models, and identify challenges future CE research should address.YOU SAY ILLEGAL, I SAY LEGITIMATE: ENTREPRENEURSHIP IN THE INFORMAL ECONOMYThe entrepreneurial process drives economic activities in the formal economy; however, little is known theoretically about how the entrepreneurial process works in the informal economy. To address this theoretical gap, we employ a multi-level perspective integrating entrepreneurship theory (micro-level) with institutional (macro-level) and collective identity (meso-level) theories to examine the role institutions and collective identity play in the recognition and exploitation of opportunities in the informal economy. Additionally, we explore factors that influence transition to the formal economy.
2:30 PM - 4:00 PM , SB 117 Speaker: Stephen TallmanUniversity: University of Richmond Robins School of BusinessAbstract: This paper examines the choice of governance mechanisms in the biotechnology industry. We posit that the choice between an institutional and contractual mechanism is influenced by partner concerns regarding appropriation and co-ordination. We hypothesize that the transactional complexity of the alliance reflected in multi-directional technology transfer and the number of participants will increase the likelihood of an institutional mechanism. In addition, we posit that alliances within national boundaries and those located in countries with strong intellectual property regimes reduce the likelihood of an institutional mechanism. Our findings regarding alliances in the biotechnology industry provide strong support for our hypotheses. Ex post analysis offers interesting interpretations of the relative pressures of coordination needs as compared to IP protection needs.
12:00 PM - 13:30 PM , SB 117 Don Beall Center for Innovation & EntrepreneurshipSCIENCE & ART OF INNOVATION EVENTSpeaker: Jason DedrickUniversity: University of California, IrvineAbstract: This paper analyzes the distribution of financial value from innovation in the global supply chains of iPods and notebook computers. We find that Apple has captured a great deal of value from the innovation embodied in the iPod, while notebook makers capture a more modest share of the value from PC innovation. In order to understand these differences, we employ concepts from theories of innovation and industrial organization, finding significant roles for complementary assets, appropriability regimes, standards, and bargaining power.
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