Should your firm invest in cyber risk insurance?

Firms have increasingly been turning to cyber risk insurance in order to better manage cyber threats and any resulting legal liability from data breaches. But how useful is this tactic? Herein, I analyze the impact of cyber attacks on firms, some of the applicable U.S. law shaping private sector responses to data breaches, and the extent to which cyber risk insurance helps mitigate the cyber threat. Ultimately, I argue that firms must take a proactive stance toward managing cyber attacks—not only for their wellbeing, but also to enhance overall cybersecurity and help secure critical national infrastructure.     

Is the social drinker killing your company?

Alcoholics, at least, usually don't last long enough to do much damage. Social drinkers, however, who walk steadily and talk clearly, are always somewhat mentally impaired, often for four to sixteen hours after lunch or after a night out with the gang. Their poor judgment and ill-considered decisions could be running your company into the ground.     

Is innovation in pricing your next source of competitive advantage?

Few companies treat innovation in pricing as seriously as product innovation or business model innovation. However, after interviews with 50 executives and the analysis of pricing practices of 70 companies worldwide, our research suggests that innovation in pricing may be a company's most powerful—and, in many cases, least explored—source of competitive advantage. Innovation in pricing brings new-to-the-industry approaches to pricing strategies, to pricing tactics, and to the organization of pricing with the objective of increasing customer satisfaction and company profits; too many companies today see pricing as a win/lose proposition between themselves and their customers. Innovation in pricing breaks this deadlock and shows how to increase profits and customer satisfaction conjointly. As a result of our research, we present a canvas laying out more than 20 possible avenues for innovation in pricing, offering to any organization—regardless of size, industry, or nationality—a few key ideas on how to increase both profits and customer satisfaction.     

The candidate experience: Is it damaging your employer brand?

The importance of the candidate experience has only recently gained attention as the war for talent ensues. Despite its importance, there is a paucity of research examining the exchange relationship between the job candidate and the organization during the recruitment process. This article presents a model—illustrating the connections and exchanges made among an organization, the job candidate, and the organization’s recruitment process—that forms the candidate experience and, in turn, affects the employer’s brand either positively or negatively. Based on this framework, guidelines are presented to assist organizations in ensuring a positive candidate experience that will result in the strengthening of the employer brand and improving recruitment and business outcomes. Some of these business outcomes include strengthening relationships with customers and investors, referring friends to the company, and participating in future searches conducted by the organization.     

Will AI ever sit at the C-suite table? The future of senior leadership

As the sophistication of artificial intelligence (AI) systems develop and AI becomes a key element of organizational strategy across a wide spectrum of industries, new demands are being placed on senior leaders. To understand the growing challenges leaders will face in the age of AI, we conducted interviews with 33 senior leaders in several countries across a wide range of industries. Our research highlights key capabilities and skills that leaders will require. Underlying these capabilities is a mindset oriented toward continuous learning and self-development, which will enable ongoing and rapid adaptation to change. Our findings identified the following key capabilities: digital know-how, data-driven focus, networking, ethics, and agility. To successfully navigate the coming era, senior leaders will need to focus on reskilling the workforce, recruiting and retaining highly skilled talent, building an intrapreneurial culture, and managing unprecedented changes in technologies and the nature of work.     

CEO retirement compensation: Is inside debt excess compensation or a risk management tool?

CEOs face constant scrutiny over their compensation packages. This scrutiny has only intensified amid discussions of CEO-to-employee pay ratios and income inequality nationwide. CEO retirement packages are criticized as camouflage compensation used to award excessive compensation to CEOs and were, prior to 2006, less transparent than they are now. Thanks to the transparent disclosures now required by the SEC, we have a better understanding of the types and amounts of compensation owed to CEOs after they depart or retire, termed inside debt. I investigate whether all CEO inside debt components share similar incentive effects and offers some thoughts on how companies might structure these packages to be most effective. I discuss the structure and incentive effects of the two primary components of inside debt: deferred compensation and supplemental executive retirement plans (SERPs). I explain why inside debt, particularly CEO SERPs, may actually help companies manage firm risk. Finally, I outline the best ways to structure inside debt so that it functions as a resource to manage firm risk and foster a long-term perspective rather than mirroring the incentive effect of equity, increasing risk, and encouraging a myopic focus.     

Does gay-themed advertising haunt your brand?

This study is designed to investigate the effect of gay-themed advertising as well as consumers’ gender, tolerance towards homosexuality (low vs high tolerance) and consumers’ brand commitment (low vs high commitment) on attitude towards ad and attitude towards brand. The study result suggests that people exposed to non-gay-themed ads had more positive attitudes towards the brand than did people exposed to gay-themed ads. The study findings suggest that ads featuring homosexual imagery could lead to negative brand evaluation. The study finds that heterosexual males exposed to such ads had less favourable attitudes towards the advertising and brand as well. The study finds that subjects with high tolerance towards homosexuality have more positive attitudes towards the ad and brand, and have higher purchase intention than do subjects with low tolerance. Furthermore, the results suggest that people with high brand commitment had more favourable attitudes towards ad and brand. Practical and theoretical implications are discussed.     

Are your cash-flow tools recession ready?

In good times like those most businesses have enjoyed for the past decade, business owners have typically watched their income statements with pleasure, as year-to-year performance gains have fattened their dividend payouts and increased the valuation of the companies they own and run. All too often in such times, scant attention is paid to what’s between the top line and the bottom line of the income statement. Worse, most business owners, in my experience, give little more than a cursory nod to the balance sheet. Why does this matter? When a recession lands on their doorstep with a sudden thud, as it apparently just has, many of these same people will find themselves having sailed too close to the wind, with cash running out and a dearth of tools to help them weather the storm and understand what has gone wrong. But it need not be so, for there are four simple tools to help any business owner answer these four important questions: (1) Where is cash going in my business, and where is it coming from? (2) To what extent are my profit margins improving or declining, and why? (3) To what extent am I effectively managing the cash-flow relationships with my customers and my suppliers? (4) What, if anything, can I do to better manage the cash that flows into and out of my business? If your business is threatened by the COVID-19 pandemic, here are some tools to help it survive.     

Is your organization conducive to the continuous creation of social value? Toward a social corporate entrepreneurship scale

Over the last decade, explicit emphasis on the creation of social value has grown in profit-seeking firms as well as nonprofits and has even led to the emergence of a new legal organizational classification known as for-benefit corporations. Like financial value, social value is dynamic and therefore subject to perpetual changes in the firm’s external environment, changes that yield opportunities and threats for the firm. Although social entrepreneurship researchers have begun to study the identification and exploitation of opportunities to create social value, this research has taken place primarily within the context of startup organizations. In contrast, corporate entrepreneurship research has emphasized value creation within existing firms, but focused primarily on the identification and exploitation of opportunities to create financial value. Combining the two, we examine the creation of social value within the firm by proposing the social corporate entrepreneurship scale (SCES), a new instrument that measures organizational antecedents for social corporate entrepreneurship and offers managers an opportunity to analyze whether the perceived environment is supportive of corporate entrepreneurial behaviors intended to create social as well as financial value. The article concludes with a discussion of the instrument’s potential contribution to managerial practice.     

ECB: Independence at risk?

The extraordinary measures taken by the ECB to combat the fi nancial crisis have led many observers to question whether the bank has put its independence at risk. The bank’s vow to do “whatever it takes” to save the euro has added a second (and potentially contradictory) goal alongside its primary mission of achieving price stability. This expansion of the ECB mandate could expose the bank to national and European political demands, thereby endangering its prized independence.     

Are your customers worth more than money?

This paper suggests that relationship marketing, with its focus on customer retention and managing the customer relationship over its lifetime, entails understanding the twin aims of what value means for the customer and also the value of the customer to the retailer. The emphasis in this paper is the latter as it is often assumed to be non-problematic. Different methods of assessing the value of customers in terms of profitability are evaluated and their shortcomings discussed. The paper goes on to propose that economic value, reflecting risk, is a better measure of the value of the customer. However, even economic value has a shortcoming: calculations of the total value of the customer should include relationship benefits as well as economic value. Strategies to maximise relationship benefits are discussed.     

The success of stock selection strategies in emerging markets: Is it risk or behavioral bias?

We examine competing explanations, based on risk and behavioral models, for the profitability of stock selection strategies in emerging markets. We document that both emerging market risk and global risk factors cannot account for the significant excess returns of selection strategies based on value, momentum and earnings revisions indicators. The findings for value and momentum strategies are consistent with the evidence from developed markets supporting behavioral explanations. In addition, for value stocks, the most important behavioral bias appears to be related to underestimation of long-term growth prospects, as indicated by above average earnings revisions for longer post-formation horizons and by quite rapidly improving earnings growth expectations. Furthermore, we find that overreaction effects play a limited role for the earnings revisions strategy, as there is no clear return reversal until five years after portfolio formation, setting this strategy apart from momentum strategies.     

Want to make me happy? Tell me about your experiences but not your objects

Evidence indicates that experiences bring greater benefits to consumers than objects. Extending this research beyond the actual purchaser, this work examines individuals who experience the purchase only indirectly via a conversation—listeners. It explores how conversations about experiential versus material purchases affect listeners socially and emotionally. Results show that hearing about others' experiences (vs. objects) advances listeners' happiness more. This finding shows that the scope of experiential purchases' advantage is wider than previously known. Further, this work identifies a sequential mechanism: Conversations about experiences (vs. objects) are more substantive, allowing listeners to build stronger social connections with tellers and, in turn, gain more happiness from the interaction. Critically, this mechanism explains the effect above and beyond a previously-advanced mechanism via perceived motivation. Additionally, this work identifies a boundary of the model: purchase valence. Theoretical and practical implications for managers, consumers, and policymakers are discussed.     

Does your religion make a difference in your business ethics? The case of consolidated foods

While the literature in business ethics abounds with philosophical analyses, perspectives from religious thinkers are curiously underrepresented. What religious analysis has occured has often been moralistic in tone, more fit to the pulpit than the classroom or the boardroom. In the three essays that follow, presented originally at a panel at the Annual Meeting of the American Academy of Religion in 1989, ethicists from the Protestant, Roman Catholic, and Jewish traditions analyze a case study familiar to many who teach and research in business ethics — the Consolidated Foods Case. Each author shows how a particular religious tradition might react to the case. The authors show how insights from their traditions would affect corporation's moral deliberations about policy. Specific policy recommendations are offered to CEO John Bryan. Louke Siker recieved her Ph.D. in 1987. She has taught Christian ethics and business ethics at Wake Forest University and Loyola Marymount University. Her research interests include methodology in business ethics. She is the author of An Unlikely Dialogue: Barth and Business Ethicists on Human Work, Annual of the Society of Christian Ethics, 1989. James Donahue is an Associate Professor of Theological Ethics at Georgetown University, Washington, D.C. His research and publications focus on methodology in ethics, ethics and institutions, and ethics and the professions. He has published in Horizons, Religious Studies Review, Social Thought, Bioethics Books, and The Annual of the College Theology Society. Ronald M. Green is the John Phillips Professor of Religion in the Department of Religion, Dartmouth College. He also serves as Adjunct Professor of Business Ethics at Dartmouth's Amos Tuck School of Business Administration, where he is responsible for first and second year courses on business ethics. He has written many articles in theoretical and applied ethics. He is the author of three books, Population Growth and Justice (Scholars Press, 1975), Religious Reason (Oxford University Press, 1978) and Religion and Moral Reason (Oxford University Press, 1988). Professor Green is currently working, with Dr. Robbin Derry, on a textbook in business ethics entitled The Ethical Manager to be published by Macmillian.This is a summary of the Consolidated Foods Corporation Case # 382–158, Harvard Business School, 1982. It is used with the permission of its author, Kenneth E. Goodpaster.Author of A Protestant Response to the Consolidated Food Case.Author of A Catholic Response ...Author of A Jewish Response ...