Management Science 2013
Management Insights
Abstract
Francesca Gino, Erin L. Krupka, Roberto A. Weber Does the option for regulatory oversight change behavior? Although monitoring and regulation can be used to combat socially costly unethical conduct, their intended targets can often avoid regulation or hide their behavior. This surrenders at least part of the effectiveness of regulatory policies to firms' and individuals' decisions to voluntarily submit to regulation. The authors study individuals' decisions to avoid monitoring or regulation and thus enhance their ability to engage in unethical conduct. They conduct a laboratory experiment in which participants engage in a competitive task and can decide between having the opportunity to misreport their performance and having their performance verified by an external monitor. To study the effect of social factors on the willingness to be subject to monitoring, the authors vary whether participants make this decision simultaneously with others or sequentially, as well as whether the decision is private or public. The insight for management: The opportunity to avoid being submitted to regulation produces more unethical conduct than situations in which regulation is either exogenously imposed or entirely absent. Elena Obukhova, George Lan Do job seekers benefit from contacts? Although it is intuitively plausible that a job seeker benefits by using contacts in her job search, researchers have been plagued by theoretical disagreements and inconclusive empirical evidence. Single-firm studies consistently find that job seekers applying through referrals achieve better labor-market outcomes than job seekers applying without referrals, but the evidence from job-seeker studies is mixed. To solve this puzzle, the authors clarify the distinction between having social capital and using contacts as a search method. They examine the school-to-work transition of 291 university graduates who engaged in 3,112 contemporaneous job searches in their study. The insight for management: Although a job seeker's social capital may not affect whether or not she uses contacts to search for a job, using contacts as a job-search method does improve her job-search outcomes. Anandasivam Gopal, Manu Goyal, Serguei Netessine, Matthew Reindorp How does a new product launch affect plan productivity? Product launch—an event when a new product debuts for production in a plant—is an important phase in product development. But launches disrupt manufacturing operations, resulting in productivity losses. Using data from North American automotive plants from years 1999–2007, the authors estimate that a product launch entails an average productivity loss of 12%–15% at the plant level, which translates to a monetary loss of 42–53 million per launch in lost productivity. The authors identify several ways to mitigate the decrease in productivity. They suggest that product (or mix) flexibility in the body shop is critical for reducing the productivity loss. Also, a plant's past experiences with product launches as well as with manufacturing similar products (specifically, on the same platform as the launch product) temper the productivity losses even further. Nevertheless, there are subtle differences in the accrued learning with these two types of experiences: Whereas the positive impact of platform experience persists over time, the learning accrued with launching other products in the same plant decays more quickly. The insight for management: Launching products at a flexible plant with appropriate platform experience could recover approximately $31 million per launch in lost productivity. Linda V. Green, Sergei Savin, Nicos Savva How many nurses should be scheduled on a given day? The problem of determining nurse staffing levels in a hospital environment is a complex task because of variable patient census levels and uncertain service capacity caused by nurse absenteeism. The authors combine an empirical investigation of the factors affecting nurse absenteeism rates with an analytical treatment of nurse staffing decisions. Using data from the emergency department of a large urban hospital, they find that absenteeism rates are consistent with nurses exhibiting an aversion to higher levels of anticipated workload. The authors provide characterizations of the optimal staffing levels in both situations and show that the failure to incorporate absenteeism as an endogenous effect results in understaffing. The insight for management: Understaffing creates absenteeism and worsens service levels; the optimal staffing levels should consider the reaction of staff who may not report to work when anticipated workloads are high. Felipe A. Csaszar, J. P. Eggers How does the method of decision making affect outcomes? The authors study four information aggregation structures commonly used by organizations to evaluate opportunities: individual decision making, delegation to experts, majority voting, and averaging of opinions. They investigate how the performance of each of these structures is contingent upon the breadth of knowledge within the firm and changes in the environment. They explore when delegation is preferable to other structures, such as voting and averaging. They show that that delegation is the most effective structure when there is diversity of expertise, when accurate delegation is possible, and when there is a good fit between the firm's knowledge and the knowledge required by the environment. Otherwise, depending on the knowledge breadth of the firm, voting or averaging may be the most effective structure. Finally, they use their model to shed light on which structures are more robust to radical environmental change and when crowd-based decision making may outperform delegation. The insight for management: How a decision should be made depends on critical attributes of the organization and problem type. Haitao Li, Tao Li, Cindy Yu Is the Federal Reserve pro-growth or anti-inflation? The authors study the time-varying nature of U.S. monetary policies They find that the Fed is proactive in controlling inflation in one regime and accommodative for growth in another. Moreover, proactive monetary policies are associated with more stable inflation and output gap and therefore could have contributed to the Great Moderation. The authors also highlight the importance of switching regimes for term structure modeling. Without the regimes, inflation and output can explain less than 50% of the variations of bond yields. With the regimes, the two variables can explain more than 80% of the variations of bond yields. The insight for management: The Fed can be either pro-growth or anti-inflation; in order to understand Fed behavior, it is critical to account for regime changes. Nan Jia, Jing Shi, Yongxiang Wang How do trading partners coinsure to improve performance? Using novel transaction-level data on Chinese business groups, the authors provide direct evidence of the coinsurance theory of business groups by investigating when different types of internal resources are transferred within a business group. The authors find that in Chinese business groups, a credit crunch experienced by the controlling shareholding firm (the “controller”) of a publicly listed firm increases the loan-based related party transactions (RPTs) including loan guarantees and intercorporate loans provided by the listed firm to the controller. In turn, when the listed firm's performance dips, the controller and its supporting firms provide more support to the listed firm in the form of non-loan-based RPTs. The insight for management: Business groups support each other in order to ensure the successful continuation of the group. Monic Sun, Feng Zhu How is ad content affected by contract terms? When incentivized by ad revenue, content providers are more likely to tailor their content to attract “eyeballs,” and as a result, popular content may be excessively supplied. The authors empirically test this prediction by taking advantage of the launch of an ad-revenue-sharing program initiated by a major Chinese portal site in September 2007. Participating bloggers allowed the site to run ads on their blogs and received 50% of the revenue generated by these ads. After analyzing 4.4 million blog posts, the authors find that, relative to nonparticipants, popular content increased by approximately 13% on participants' blogs after the program took effect. Approximately 50% of this increase can be attributed to topics shifting toward three domains: the stock market, salacious content, and celebrities. Meanwhile, relative to nonparticipants, participants' content quality increased after the program took effect. The authors also find that the program effects are more pronounced for participants with moderately popular blogs and seem to persist after participants enroll in the program. The insight for management: The content and quality of ads depend directly on the contract terms of the content provider; revenue incentives increase the intensity of ads for the most popular items and improve ad quality. Izak Duenyas, Bin Hu, Damian R. Beil How do auction purchases affect supply contracts? The authors study an optimal procurement mechanism for a newsvendor-like problem where the buyer's (newsvendor's) purchase price of the supplies is not fixed but is determined through interaction with candidate suppliers. The buyer has some idea of supplier costs but does not know their costs exactly. Recent literature has shown how the buyer can implement the optimal procurem
- DOI
- 10.1287/mnsc.2013.1812
- Sources
- openalex