Study of auto recalls shows carmakers delay announcements until they can ‘hide in the herd’

Posted on February 22, 2021 by George Vlahakis

BLOOMINGTON, Ind. – Automotive recalls are occurring at record levels, but seem to be announced after inexplicable delays. A research study of 48 years of auto recalls announced in the United States finds carmakers frequently wait to make their announcements until after a competitor issues a recall – even if it is unrelated to similar defects.

This suggests that recall announcements may not be triggered solely by individual firms’ product quality defect awareness or concern for the public interest, but may also be influenced by competitor recalls, a phenomenon that no prior research had investigated.

Researchers analyzed 3,117 auto recalls over a 48-year period — from 1966 to 2013 — using a model to investigate recall clustering and categorized recalls as leading or following within a cluster. They found that 73 percent of recalls occurred in clusters that lasted 34 days and had 7.6 following recalls on average.

George Ball

On average, a cluster formed after a 16-day gap in which no recalls were announced. They found 266 such clusters over the period studied.

“The implication is that auto firms are either consciously or unconsciously delaying recall announcements until they are able to hide in the herd,” said George Ball, assistant professor of operations and decision technologies and Weimer Faculty Fellow at the Indiana University Kelley School of Business. “By doing this, they experience a significantly reduced stock penalty from their recall.”

Ball is co-author of the study, “Hiding in the Herd: The Product Recall Clustering Phenomenon,” recently published online in Manufacturing and Service Operations Management, along with faculty at the University of Illinois, the University of Notre Dame, the University of Minnesota and Michigan State University.

Researchers found as much as a 67 percent stock market penalty difference between leading recalls, which initiate the cluster, and following recalls, who follow recalls and hide in the herd to experience a lower stock penalty.

This indicates a “meaningful financial incentive for auto firms to cluster following recalls behind a leading recall announcement,” researchers said. “This stock market penalty difference dissipates over time within a cluster. Additionally, across clusters, the stock market penalty faced by the leading recall amplifies as the time since the last cluster increases.”

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Kelley School hosts Big Ten event to encourage female and underrepresented professionals to pursue academic careers in business

Posted on February 18, 2021 by George Vlahakis

Jason Brown, left, is an associate professor of accounting at Kelley.

BLOOMINGTON, Ind. – A frequent issue facing American business education is a critical shortage of academically trained faculty members from underrepresented populations. To help address this issue, the Indiana University Kelley School of Business is hosting a webinar on Feb. 25 with the 14 business schools of the Big Ten.

The consecutive three-session virtual event, “Shape the Future of Diversity with a PhD,” will begin at 6:30 Eastern Time.

Dionne Nickerson

Nine faculty members and five doctoral students from underrepresented groups at Big Ten schools, including Dionne Nickerson, an assistant professor of marketing at Kelley, will discuss what it is like to pursue an academic career and the impact one can make on today’s students and tomorrow’s business leaders. In addition to Nickerson, another participant is associated with the PhD Project.

The three 30-minute sessions will focus on the benefits of pursuing a career in academia, what the academic career path entails and the steps to take for those who are interested. Those interested can attend any or all of the sessions. Registration is free and available at the program site at gokelley.iu.edu/phd.

Participation by women and those from underrepresented backgrounds is strongly encouraged.

The planning group for the event includes Rebecca Slotegraaf, chair of doctoral programs, professor of marketing and the Neal Gilliatt Chair. She notes that those who attend will learn how a career in academia can enable people to shape the future of business and how it can be multifaceted and fulfilling.

“One of the challenges we face is generating awareness and familiarity with a PhD in Business and an academic career. While people are generally aware of PhDs in the life sciences or social sciences, many are unaware that you can pursue a PhD in Business,” Slotegraaf said. “Most students earning a Bachelor’s degree in Business or an MBA seek employment in industry rather than academia. For many, the path toward a PhD and a career in academia remain opaque. (more…)

Pritzker Private Capital launches PPC University with IU’s Kelley School of Business

Posted on February 16, 2021 by George Vlahakis

CHICAGO – Pritzker Private Capital (PPC), a leader in family direct investing, today announced the launch of PPC University, a series of customized, graduate-level business education courses developed and presented in partnership with Kelley School of Business Executive Education at Indiana University.

PPC University courses will support the professional development of emerging leaders across the PPC family of companies. The program is guided by PPC’s longstanding commitment to partner with its companies, invest in its people and culture, and build successful businesses for the long term. PPC University is scheduled to begin instruction in March 2021.

“PPC University embodies our commitment to support the growth of our companies and invest in our talented team,” said David Gau, Partner and Head of Operations at Pritzker Private Capital. “As a family-owned business, we understand the importance of providing high-quality educational and professional development opportunities as we build a culture that upholds our core values of honesty, integrity and loyalty. We are pleased to launch PPC University alongside the exceptional educators at the Kelley School of Business.”

“We’re honored to work with Pritzker Private Capital in developing this important initiative,” said Idalene Kesner, dean of the Kelley School and the Frank P. Popoff Chair of Strategic Management. “The business world is always evolving, and we’ve been an experienced leader in helping businesses and professionals grow along with it for more than 40 years. It’s always exciting to see where the extra momentum takes people, and we’re looking forward to working with the future leaders in the PPC family.”

PPC University will offer tailored courses designed and taught by Kelley School faculty. Courses will focus on five specialty areas: modern marketing, finance, operations, and data analytics, leadership and people management. Each course will feature eight virtual lectures over the course of a month, taught by Kelley School professors with select PPC leadership participating as guest lecturers. At the conclusion of the program, participants will receive a certificate for their participation. (more…)

Prebys Scholar is first IU student chosen for prestigious program for African American men

Posted on February 12, 2021 by George Vlahakis

Zachary Harper

WASHINGTON — Zachary Harper, an accounting major at the Indiana University Kelley School of Business and a Conrad Prebys Scholar, been chosen by the Institute for Responsible Citizenship to participate in its prestigious program during the summers of 2021 and 2022.

The Institute is an intensive two-summer program for some of America’s best and brightest African American male college students. The scholars live together in a residence hall, work at internships in their fields of interest, participate in a rigorous seminar on economic and constitutional principles, meet privately with prominent public and private sector leaders, participate in personal and professional development workshops, and enjoy a variety of social activities.

Admission into the Institute is extremely competitive. The newly-selected scholars represent a range of backgrounds and interests and attend a variety of colleges and universities, including Harvard and Yale universities, the University of Chicago, Howard University and New York University.

Harper is the first IU student ever selected to participate since the Institute was established in 2001.

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Next Equity Now talk to highlight challenges for the disabled now and after COVID-19

Posted on February 11, 2021 by George Vlahakis

BLOOMINGTON, Ind. — As we all know, COVID-19 has had a profound effect on the workplace. Many working from home have faced the additional challenges of caring for children and other family members and other concerns normally outside the job environment.

But what about for those with disabilities?

Marianne DelPo Kulow

Marianne DelPo Kulow, the Gregory H Adamian Professor of Law and business law department chair at Bentley University, will be the next presenter in Equity Now, an online speaker series on race, gender, and how law and policy can facilitate equality, fairness and inclusion in organizations.

She will lead a discussion on the topic, “The Legal Environment for Workers with Disabilities: Before During and After COVID-19.” Her talk will begin at 6 p.m. (Eastern) on Tuesday Feb. 16.

Her talk will highlight some of the most important opportunities, challenges and legal issues facing workers with disabilities, with particular emphasis on how a post-COVID environment may radically alter how people with disabilities interact with and succeed in organizations.

The Indiana University Kelley School of Business is co-sponsoring the Equity Now series along with the business schools at the University of Connecticut and Virginia Tech University and the Academy of Legal Studies in Business. Registration is free and open to the public.

Kulow began her legal career as a litigation attorney in Boston, first with Bingham McCutchen (then Bingham Dana & Gould) and then with Peabody & Arnold. She defended large and small companies against a variety of claims before becoming a law professor at Bentley in 1993. (more…)

Full-Time MBA Program moves into top 20 among U.S. schools in Financial Times rankings

Posted on February 9, 2021 by George Vlahakis

BLOOMINGTON, Ind. – The Full-Time MBA Program at the Indiana University Kelley School of Business continues to move up in rankings from the Financial Times, moving from 40th to 38th worldwide and from 22^nd to 18^th among U.S. schools.

As with the Economist’s rankings released last month, several MBA programs chose not to participate, but fewer opted out of the FT’s rankings. The UK-based business publication again included 100 schools in its survey.

Kelley has progressively shown improvement in the FT rankings in recent years, having been ranked 57th worldwide in 2018 and 43rd two years ago. This year, the school moved up to sixth among all U.S. public institutions and remains third in the Big Ten.

Beyond the overall numbers, a couple of other statistics help to explain the momentum. The FT’s ranking methodology involves 20 data points, including salary increases for alumni, international mobility and percentages of female and international faculty.

The Financial Times also ranked the Kelley School eighth for research, moving up from 15^th a year ago. Another key strength for Kelley – particularly during these challenging times – is career services and the school was ranked sixth worldwide.

Kyle Cattani, MBA Program chair, SungKyunKwan Professor and professor of operations management, said he, the Full-Time MBA Program team and faculty view this news as an acknowledgement of their efforts during an extraordinary time.

“We are committed to providing the best experience possible for our students. For example, in this past challenging year of COVID, we worked diligently to have our fall, first-year classes entirely in person,” Cattani said. “We appreciate when positive rankings reflect our efforts. We are always pleased to be recognized by the Financial Times as one of the top MBA programs in the world.”

The FT rankings are a popular guide across Europe and Asia and are well respected among international students.

Kelley student up for NFL’s Walter Payton Man of the Year; Three suited up for the big game

Posted on February 5, 2021 by George Vlahakis

Alec Ingold/Raiders.com

BLOOMINGTON, Ind. – In advance of Super Bowl Sunday, much of the national conversation was focused on the two teams that would be on the field. But two students at the Indiana University Kelley School of Business also were in the spotlight that weekend – Alec Ingold and Tanoh Kpassagnon – who are earning MBAs through a partnership between Kelley and the NFL Players Association.

Ingold, a fullback, was the Las Vegas Raiders’ nominee for the prestigious Walter Payton Man of the Year Award. Given annually, the award is recognized as the league’s most prestigious honor and recognizes NFL players “for outstanding community service activities off the field, as well as excellence on the field.”

All 32 Man of the Year nominees received a $40,000 donation in their name to the charity of their choice, and the winner, Russell Wilson of the Seattle Seahawks, received a $250,000 donation to his Why Not You Foundation.

Ingold has devoted much of his time and energy off the field raising funds for and serving nutritious meals to others in need, supporting the Special Olympics and spreading awareness about the need and importance for foster and adoptive families.

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Good customer service can lead to higher profits, even for utilities without competition

Posted on February 2, 2021 by George Vlahakis

young woman sat on the sofa in her living room is on the phone to her bank or insurance provider

BLOOMINGTON, Ind. – In Lily Tomlin’s classic SNL comedy sketch, her telephone operator “Ernestine” famously delivers the punchline, “We don’t care. We don’t have to. We’re the Phone Company.” But new research finds that satisfied customers mean increased profits even for public utilities that don’t face competition.

Little is known about effect of customer satisfaction at utilities. As a result, utility managers are often unsure how much to invest in customer service – if anything at all. The issue also is of interest to regulators responsible for protecting consumers.

Neil Morgan

The study, in the Journal of Marketing Research, has important implications for both managers and regulators. Customer satisfaction predicts profits at utilities — in spite of the fact that customers don’t have an option to switch if they are unhappy. It shows how keeping customers happy lowers operating costs and ultimately saves utilities money.

“As with other companies, providing good customer service has efficiency-enhancing benefits for utility firms, such as lower direct and employee engagement costs of dealing with dissatisfied customers and it generates greater customer trust and cooperation from customers,” said Neil Morgan, PETsMART, Inc. Distinguished Professor of Marketing at Kelley. “Our results indicate that — at least as currently regulated — greater satisfaction of utility customers not only ensures consumer welfare by improving utility provider efficiency but also increases the future profitability of the utility.”

Using data from U.S. public utility firms from 2001 to 2017, researchers found utilities – as currently regulated – have a cost-based incentive to deliver and improve their customers’ satisfaction.

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Entrepreneurs benefit more from emotional intelligence than other competencies, such as IQ

Posted on January 28, 2021 by George Vlahakis

african-american ethnicity woman standing confidently in office looking away

BLOOMINGTON, Ind. – Running a successful business has its challenges, but the COVID-19 pandemic has required many owners to pivot and look for new ways to operate profitably while keeping employees and consumers safe. Research from the Indiana University Kelley School of Business found that emotional intelligence – the ability to understand, use and manage emotions to relieve stress – may be more vital to a business’ survival than previously thought.

“We found that entrepreneurs benefit much more from emotional competences than other competencies — such as IQ — due to high uncertainty and ambiguity that comes with the world of entrepreneurship and even more applicable in a crisis,” said Regan Stevenson, assistant professor of entrepreneurship and management and the John and Donna Shoemaker Faculty Fellow in Entrepreneurship.

Regan Stevenson

“Being an entrepreneur is not a ‘traditional workplace setting.’ If you are an entrepreneur, you know that managing your business can often feel like you are screaming alone on an emotional rollercoaster,” Stevenson added.

According to recent U.S. Bureau of Labor Statistics, about a fifth of all new businesses fail within their first two years and nearly half are shuttered within five years. More than a million U.S. companies with employees were shuttered in 2020, in large part due to the COVID-19 pandemic. The number of bankruptcies in 2020 and those expected this year likely will approach levels last seen during the worst quarter of the 2008-09 financial crisis.

“The extreme nature of the pandemic has made one’s ability to manage emotions and social connections critically more important, especially so during these times of major disruption and crisis,” said Ernest O’Boyle, associate professor of management and entrepreneurship and the Dale M. Coleman Chair in Management.

The research found that those with a higher emotional intelligence are better able to be self-motivated and have higher social skills – even under more normal circumstances.

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Operations and Decision Technologies is fourth worldwide in terms of research contributions

Posted on January 27, 2021 by George Vlahakis

Jingjing Zhang

BLOOMINGTON, Ind. – According to new journal publication rankings from the Association for Information Systems, the Indiana University Kelley School of Business ranks fourth worldwide in terms of research contributions by its faculty in the Department of Operations and Decision Technologies.

The rankings are based on the number of publications by Kelley ODT faculty in the three top information systems journals – Management Information Systems Quarterly, Information Systems Research and Journal of Management Information Systems.

Founded in 1994, the Association for Information Systems is the premier professional organization for people and organizations who lead the research, teaching, practice and study of information systems worldwide. The association has about 5,000 members from 100 countries.

Vijay Khatri

“I realize that many rankings are perceptual, but this one is completely factual,” said Vijay Khatri, professor and chairperson of operations and decision technologies and the Judith Norman Davis and Kim G. Davis Professor of Business Analytics. “This reflects the quality of research of our faculty as well as how nimble we are as a department. For example, our faculty are engaged in research related to Covid, cybersecurity, misinformation and other topics that are pertinent from a practice perspective.”

In addition to the success by Kelley ODT faculty as a group, eight professors recently were recognized for their individual research activities. Alan Dennis, professor of information systems and the John T. Chambers Chair of Internet Systems, was honored for his extensive contributions to the discipline over his career.

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