Examples Of Current Research In Business And Management.docx

Women CEOs more likely to be targeted by activist shareholders Women CEOs are much more likely than their male counterparts to be targeted by activist shareholders, according to research conducted by a team that included two University of Alabama business professors. The study, published this month in the Journal of Applied Psychology, found male CEOs are much less likely than female CEOs to be the target of shareholder activism, and activist investors are more likely to mob female CEOs. Sometimes also called a "wolf-pack attack," mobbing by investors occurs when multiple activists converge on a firm with or without intentional coordination. "Many of the media articles we were reading about shareholder activists targeting companies seemed to involve firms with women CEOs," said Dr. Vishal Gupta, associate professor in the UA Culverhouse College of Commerce and author on the paper. "Since there are so few women CEOs at large American firms, we thought it was odd that they were mentioned so often in media coverage about activists. So, we decided to investigate if activists are actually more likely to go after women CEOs." Dr. Sandra Mortal, also co-author and an associate professor in Culverhouse, said the team sampled large, publicly traded firms for the period from 1996 to 2013. They relied on filings required by the U.S. Securities and Exchange Commission from those wanting to take an active position against a company, commonly called Schedule 13D filings, and merged those with data from the executive research firm ExecuComp. The business press, such as Forbes or the Wall Street Journal, regularly have articles about some large investors targeting or threatening the management of the companies where they hold stocks, said Mortal, who has previously worked at the SEC as research analyst where she became interested in financial market transparency and fairness. "Activists usually defend their aggressive stance against management by saying that they want to improve the way the company is being run, in effect, looking out for the common shareholders," Mortal said. "However, our research reveals there are invisible, but serious, biases in their decision to target particular firms." Whether the activist investors are actually aware of their biases was not investigated in this research, Gupta said. More broadly, the results of this study also reveal the greater scrutiny and monitoring women in leadership positions face, which is problematic considering widespread support for gender equality in the workplace, he said. The paper is titled "Do Women CEOs Face Greater Threat of Shareholder Activism Compared to Male CEOs? A Role Congruity Perspective." Journal reference: Journal of Applied Psychology

Broad experience a double-edged sword for entrepreneurs seeking investors, study shows Prior studies have shown that having a wealth of experience is beneficial for entrepreneurs seeking investors. But whether venture capitalists look favorably on a wide breadth of founder experience depends on their perception of the market environment, according to new research from the University of Notre Dame. Having a wide range of experience as a "jack-of-all-trades" can sometimes be an asset, but in certain environments this will make it difficult to get a startup business off the ground, according to "A Liability of Breadth? The Conflicting Influences of Experiential Breadth on Perceptions of Founding Teams," forthcoming in the Journal of Management by Mike Mannor, O'Shaughnessy Associate Professor of Family Enterprise in Notre Dame's Mendoza College of Business (along with Fadel Matta, Emily Block, Adam Steinbach and James Davis). Prior research has shown that investors demand experience and inexperienced founders often have trouble raising money to launch. However, the focus has been on depth of experience—how long entrepreneurs have worked in a particular industry. "What our work does is to look more closely at the specific types of experience founders bring to their venture," Mannor says. "In addition to experience depth, some founders have quite broad experiences prior to launching a new business, having worked in a wide range of industries, in different companies or in a variety of job roles. Our research shows that although investors always love deep experience, they tend to be much more mixed in their views of broad experience and apply what we describe as a 'liability of breadth,' or choosing not to invest due to concerns about the founder's ability to stay focused and execute quickly." The researchers examined 168 new ventures launching into 95 different industries from 2002 to 2010. "On the one hand, we find that when a new business launches into a crowded or highly competitive marketplace, a perceived liability of breadth leads potential investors to evaluate businesses with broadly experienced founders significantly more negatively," Mannor says. "However, when a new business launches into a fast-growing or turbulent marketplace, potential investors love founder breadth, likely because such breadth is believed to benefit these businesses through a wider Rolodex of network contacts, a more creative approach to innovation and the ability to identify more novel opportunities. Importantly, we find these positive and negative effects regarding experience breadth regardless of whether or not the founding team has a lot of prior industry experience." The research also found that broadly experienced entrepreneurs see the world differently and thus build different kinds of businesses that make money from a wider range of revenue sources and tend to locate their businesses further upstream in the value chain of an industry. "If a founding team does have a wide range of prior experiences, they can improve their odds by launching their new businessin faster growing or highly turbulent marketplaces where data shows that potential investors will strongly value their background," Mannor says, "but avoid crowded or intensely competitive markets where their history will be held against them." Mannor says investors may be better served by recognizing existing biases and taking a balanced view of founder potential. Journal reference: Journal of Management

Energy firm branding, not deals, influences customer switching Energy companies in the UK are using specific branding approaches instead of product innovation to keep customers, according to new research from the University of East Anglia (UEA). While previous research has tended to focus on pricing, this study looked at the branding strategies and personalities of the Big Six energy firms - British Gas, SSE, EDF Energy, E.ON UK, npower and Scottish Power - and whether this is increasing consumer loyalty and therefore reducing switching behaviour. The Big Six represent more than 90 per cent of all energy supplied in the UK consumer sector. Focusing on the electricity market between 2013 - when the number of customers switching providers reached its lowest level - and 2015, the researchers find that brand personality consistency over time is important. Consistent brands, such as EDF Energy, performed better as they saw decreases in switching compared to firms, like npower and Scottish Energy, that had significantly changed their brand personality position or communicated inconsistently in this period. Providers that had a significantly different brand personality position between marketing communication channels, such as their website and annual report, also had more switching than those that remained consistent. Interestingly, the majority of the brands studied were inconsistent on this measure. The findings are published today in the journal European Management Review. Lead author Dr Richard Rutter, a visiting research fellow at UEA's Norwich Business School and assistant professor at the Australian College of Kuwait, said: "This research demonstrates the long-term importance of corporate branding in the energy sector and that brand personality does have an impact on customer retention. "The Big Six energy providers recognise the power of brand identity when attempting to persuade consumers to switch providers. Rather than doing so simply on the basis of superior financial offers, they are increasingly looking to build a long-term brand personality with which consumers will identify. "These organisations wish to be viewed as customer-focused and as offering a fair deal to consumers. There seem to be subtle but important differences in the ways that each company is choosing to communicate with its domestic audience and some are more effective than others." Concentrating on companies' communication through their websites and annual reports, the researchers examined what brand personality dimensions - defined as sincerity, excitement, competence, sophistication and ruggedness - were communicated most strongly and how consistently each organisation communicated its brand between the website and annual report. They then assessed the organisation's performance, measured by consumer loyalty or switching behaviour. They found that brands communicating excitement more strongly, such as EDF Energy, had the lowest levels of switching. The findings also suggest an ideal brand personality for the UK energy sector: low to medium levels of sincerity and competence and high levels of excitement and ruggedness communicated through the website lead to better performance. The authors say the annual report should maintain this, but also communicate a higher level of competence. Co-author Prof Konstantinos Chalvatzis, of Norwich Business School and the Tyndall Centre for Climate Change Research at UEA, said: "Under scrutiny from the public and politicians, the energy sector is changing rapidly. Branding within the energy sector has become increasingly important, as energy firms seek to attract and, importantly, retain customers. "We find that certain energy brands, for example EDF Energy have communicated their personality consistently, while others, such as npower and British Gas, seem to have repositioned themselves. A strong brand personality alone is not enough to prevent consumer switching, rather, particular dimensions of personality are more favourable than others and the relevance of specific personality traits can change." The authors, who also include Prof Stuart Roper of the University of Huddersfield and Prof Fiona Lettice of Norwich Business School, recommend that firms should not drastically change their branding each year. Brand managers should also consider how to increase the communication of excitement in relation to their brands without being inauthentic, and ensure that their brand is consistent over time and between different marketing media.

Relatively quick gains could be made by reviewing external communications for consistency of language and message. The findings also highlight the need for greater emphasis on competence related language, particularly when delivering negative information. Journal reference: European Management Review

To kickstart creativity, offer money, not plaudits, study finds The best way to reward creativity is not with social-recognition awards such as plaques or other plaudits. According to published research co-written by Ravi Mehta, a professor of business administration at Illinois, it's all about the money. How should employers reward creative types for turning in fresh, inventive work: with a plaque or a party recognizing their achievement, or with cold, hard cash? According to new research co-written by a University of Illinois expert in product development and marketing, it's all about the money, honey. In contexts where a premium is placed on being original, social recognition as a reward for an especially imaginative piece of work doesn't necessarily enhance creativity, says published research co-written by Ravi Mehta, a professor of business administration at Illinois. "The general consensus in the research literature on creativity is that money hurts creativity," Mehta said. "But most of that prior research was conducted with children as the test subjects, and the participants were not specifically told that the reward was for being creative. So what is it about the contingency of rewards that impacts creativity, and would adults respond to all types of creativity-contingent rewards the same way?" Across five experiments, Mehta and his co-authors examined the role of creativity-contingent monetary rewards versus creativity-contingent social-recognition rewards on creative performance, providing new insights into the underlying motivational processes through which these rewards affect creativity. The experiments demonstrated that, within the context of creativity contingency, monetary rewards induce "a performance focus," while social-recognition rewards induce "a normative focus," according to the paper. The researchers found that the former enhances one's motivation to be original, thereby leading to more inventiveness in a creative task, while the latter hurts it. "We found that if you tell people to be creative and then give them monetary rewards, they will be more creative," Mehta said. "But wouldn't the same be true of all rewards? If you tell people to be creative and then give them a social-recognition reward instead of money, then they'll be just as creative as those you reward with money, right? We found no empirical evidence for that." Mehta said social recognition is "all about people knowing about you and your work, and thereby influencing one to act more in accordance with social norms," whereas creativity means "coming up with something different, something novel, something that is not the norm." "As adults, we don't want to come up with something that's too radical, too out-there, especially when we know that our peers will be judging us," he said. "Most of our daily activities as working adults are about adhering to social norms. We don't want to stand out too much." But when a monetary reward is dangled, people amp up their performance and consciously try to "blow the doors off the competition" in terms of creativity, Mehta said. "When you ask someone to be creative, you're asking them to be transgressive, to think beyond social norms and thought processes that are not automatic," he said. "That's why a social-recognition reward kills creativity, because it makes creators more risk-averse. It appeals to conformity, to not standing out, which drives you to the middle, not the edge. It compels you to fall in line with social norms, and there's less motivation to be creative. "People who value creativity value the bizarre, the stuff that's out there. Therefore, they're less likely to care about the approval of others, or a sense of belonging with their peers." The research has practical applications for how people generate creative ideas, and how to motivate creativeclass employees. "There's a trend among companies for crowdsourcing ideas or user-generated content," Mehta said. "Virtually all social media is user- or consumer-driven. This ought to point them in the right direction: Money talks, but social recognition doesn't." The research also is applicable to people who work at ad agencies or in creative fields.

"A little caveat, though: People in those fields are expected to be creative, so social recognition also would work for them," Mehta said. "But more money certainly wouldn't hurt them, either. In that case, both rewards would lead to more creativity." The paper will be published in the Journal of Consumer Research.

How the financial press influences investors' opinion and behavior Researchers at the University of Luxembourg have found that the financial press can have detrimental or positive effects on the behaviour of investors and their opinion on the economy as a result of the language used in reporting. While a link between financial news and the behaviour of investors has long been assumed, this study ("Modifier words in the financial press and investor expectations") is the first to deliver empirical data confirming a significant correlation between the press and the development of stocks. For the experiment, a group of 80 participants with a background in economics were presented with various news items about particular stocks. In the news items, the names of the companies were anonymized, but they included so-called "modifier words" giving each article a more negative (e.g. "devastating", "shocking") or positive (e.g. "healthy", "encouraging") angle. The factual information remained the same. Participants were then asked to assess the future performance of the stocks with a clear pattern emerging: positive news coverage also led to a positive evaluation and vice versa. Importantly, the style of news reporting had an impact on the hypothetical decision of participants to buy or sell stocks and their overall estimation of the economy. Language matters! The team of researchers - Prof. Roman Kräussl from the University of Luxembourg's Luxembourg School of Finance and Prof. Ronald Bosman and Elizaveta Mirgorodskaya (both Vrije Universiteit Amsterdam) concluded that the evaluation of the economy is less fundamental data-driven than it is emotional impressiondriven. With the press playing a big role in how the public perceive and understand the economy and financial markets, the experiment provides evidence of the influential role of the media. "In a time when journalism is increasingly under pressure, it is important to highlight the influence media can have on real life scenarios," commented Prof. Kräussl. "We live in the age of 'fake news' and 'alternative facts', of fast-paced online and social media. Our research clearly shows the importance of factual and accurate reporting and the power that words yield over investors and, by extension, stock markets and the economy."

Journal reference: Journal of Economic Behaviour and Organisation