- forthcoming
- PublicAffairs
Why They Do It: Inside the Mind of the White-Collar Criminal
Abstract—From the financial fraudsters of Enron, to the embezzlers at Tyco, to the Ponzi schemer Bernie Madoff, the failings of corporate titans are regular fixtures in the news. But what drives wealthy and powerful people to white-collar crime? I draw from extensive personal interaction and correspondence with nearly fifty former executives as well as research in psychology, criminology, and economics to investigate how once-celebrated executives become white-collar criminals.
Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51488
- June 2016
- American Journal of Managed Care
When Doctors Go to Business School: Career Choices of Physician-MBAs
Abstract—There has been substantial growth in the number of physicians pursuing Master of Business Administration (MBA) degrees over the past decade, but there is continuing debate over the utility of these programs and the career outcomes of their graduates. The authors analyzed the clinical and professional activities of a large cohort of physician-MBAs by gathering information on 206 physician graduates from the Harvard Business School MBA program who obtained their degrees between 1941 and 2014. Key outcome measures that were examined include medical specialty, current professional activity, and clinical practice. Chi square tests were used to assess the correlations in the data. Among the careers that were tracked (n = 195), there was significant heterogeneity in current primary employment. The most common sectors were clinical (27.7%), investment banking/finance (27.0%), hospital/provider administration (11.7%), biotech/device/pharmaceutical (10.9%), and entrepreneurship (9.5%). Overall, 84% of physician-MBAs entered residency; approximately half (49.3%) remained clinically active in some capacity and only one-fourth (27.7%) reported clinical medicine as their primary professional role. Among those who pursued residency training, the most common specialties were internal medicine (39.3%), emergency medicine (10.4%), orthopedic surgery (9.2%), and general surgery (8.6%). Physician-MBAs trained in internal medicine were significantly more likely to remain clinically active (63.8% vs 42.4%; P = .01). Clinical activity and primary employment in a clinical role decreased after degree conferment. After completing their education, a majority of physician-MBAs divert their primary professional focus away from clinical activity. These findings reveal new insights into the career outcomes of physician-MBAs.
Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51465
- August 2016
- PLoS ONE
The Effect of Background Music in Shark Documentaries on Viewers' Perceptions of Sharks
Abstract—Despite the ongoing need for shark conservation and management, prevailing negative sentiments marginalize these animals and legitimize permissive exploitation. These negative attitudes arise from an instinctive yet exaggerated fear, which is validated and reinforced by disproportionate and sensationalistic news coverage of shark ‘attacks’ and by highlighting shark-on-human violence in popular movies and documentaries. In this study, we investigate another subtler yet powerful factor that contributes to this fear: the ominous background music that often accompanies shark footage in documentaries. Using three experiments, we show that participants rated sharks more negatively and less positively after viewing a 60-second video clip of swimming sharks set to ominous background music, compared to participants who watched the same video clip set to uplifting background music or silence. This finding was not an artifact of soundtrack alone because attitudes toward sharks did not differ among participants assigned to audio-only control treatments. This is the first study to demonstrate empirically that the connotative attributes of background music accompanying shark footage affect viewers' attitudes toward sharks. Given that nature documentaries are often regarded as objective and authoritative sources of information, it is critical that documentary filmmakers and viewers are aware of how the soundtrack can affect the interpretation of the educational content.
Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51481
The Value of Trading Relationships in Turbulent Times
Abstract—This paper investigates how dealers’ trading relationships shape their trading behavior in the corporate bond market. Dealers charge lower spreads to dealers with whom they have the strongest ties, and more so during periods of market turmoil. Systemically important dealers exploit their connections at the expense of peripheral dealers as well as clients, charging higher markups than to other core dealers. We also show that intermediation chains lengthened by 20% following the collapse of a flagship dealer in 2008 and even more for institutions strongly connected to this dealer. Finally, dealers drastically reduced their inventory during the crisis.
Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=51417
Unpacking Team Diversity: An Integrative Multi-Level Model of Cross-Boundary Teaming
Abstract—Teaming across expertise boundaries, within and across organizations, is an increasingly popular strategy for innovation. Although membership diversity expands the range of perspectives that teams can draw upon to innovate, meta-analyses of the team-diversity literature have found weak or inconsistent support for that assumption. These studies also have typically examined effects of team diversity in relatively stable bounded teams, rather than in newly formed temporary groups. Drawing from two streams of research to unpack team diversity, this paper seeks to describe the complexity of cross-boundary teaming, while highlighting factors that may be central to its effectiveness. Past research on team diversity suggests numerous moderators that affect the diversity-performance relationship in teams, while research on knowledge and practice explores the situated activities and logics of diverse experts in great depth. Both streams thus shed light on team diversity, offering complementary insights. We develop a model of cross-boundary teaming that marries these streams and offers human resource management researchers and professionals insights and approaches for helping diverse teams tackle complex problems.
Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=51467
Venture Capital Data: Opportunities and Challenges
Abstract—This paper describes the available data and research on venture capital investments and performance. We comment on the challenges inherent in those data and research as well as possible opportunities to do better.
Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=51460
Concentrated Capital Losses and the Pricing of Corporate Credit Risk
Abstract—Using proprietary data on all credit default swap (CDS) transactions in the U.S. from 2010 to 2014, I show that a firm’s CDS spreads are driven by capital fluctuations of that firm’s net protection sellers. Capital fluctuations of sellers account for 10% of the time-series variation in spread changes, a significant amount given that observable firm and macroeconomic factors account for less than 16% of variation during this span. Sellers of protection are also highly concentrated, with five sellers responsible for nearly half of net selling. This concentration leads to market fragility—losses at the largest sellers have an outsized impact on CDS pricing. These findings suggest a high degree of short-run market segmentation and support theories where capital market frictions play a first-order role in determining market prices.
Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=49425
Popular Acceptance of Inequality Due to Brute Luck and Support for Classical Benefit-Based Taxation
Abstract—U.S. survey respondents’ views on distributive justice are shown to differ in two specific, related ways from what is conventionally assumed in modern optimal tax research. A large share of respondents, and in some cases a large majority, resist the full equalization of inequality due to brute luck that standard analyses would recommend. Related, a similar share prefer a classical benefit-based logic for the assignment of taxes over the conventional logic of diminishing marginal social welfare. Moreover, these two views are linked: respondents who more strongly resist equalization are more likely to prefer the classical benefit-based principle. Together, these results suggest that a large share of the American public views the allocation of pre-tax incomes as relevant to optimal tax policy and—at least in part—justly deserved unless proven otherwise, judgments that are inconsistent with standard welfarist objectives.
Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=50797
- Harvard Business School Case 516-117
Legendary Entertainment: Moneyball for Motion Pictures
Legendary, the Hollywood studio responsible for such hits as Jurassic World and The Dark Knight, decides to take the marketing of its films in-house, and to market them fan-by-fan. Owner Thomas Tull acquires the big-data-in-sports firm started by Matt Marolda and appoints him to run marketing analytics for Legendary. The methods perform well in the motion picture market. Other Hollywood studios want to lease its services, and firms outside of entertainment express interest. Marolda and Tull consider setting up Legendary Analytics as an independent consulting business. At that point Dalian Wanda, China's largest entertainment and real estate conglomerate, buys Legendary. Should Marolda focus on China or the diversified U.S. market?
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- Harvard Business School Case 216-039
Supply Chain Finance at Procter & Gamble
In April 2013, Procter & Gamble (P&G), the world’s largest consumer packaged goods (CPG) company, announced that it would extend its payment terms to suppliers by 30 days. At the same time, P&G announced a new supply chain–financing (SCF) program giving suppliers the ability to receive discounted payments for their P&G receivables. Fibria Celulose, a Brazilian supplier of kraft pulp, joined the program in 2013, but was re-evaluating the costs and benefits of participating in the SCF program in the summer of 2015. The firm’s treasury group and its U.S. country manager must decide whether to keep using the program and, if so, whether to keep their existing SCF banking relationship or start a new relationship with another global SCF bank.
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- Harvard Business School Case 716-076
Managing the European Refugee Crisis
In 2016, Europe struggles to cope with one of the largest refugee flows it has ever witnessed.
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