Publications

November 2011
Article

Corporate Governance When Founders Are Directors

By: Feng Li and Suraj Srinivasan

We examine CEO compensation, CEO retention policies, and M&A decisions in firms where founders serve as a director with a non-founder CEO (founder-director firms). We find that founder-director firms offer a different mix of incentives to their CEOs than other firms.... View Details

Keywords: Corporate Governance; Executive Compensation; Retention; Policy; Motivation and Incentives; Performance; Governing and Advisory Boards; Mergers and Acquisitions; Wages; United States

Teaching Interest

Managing Human Capital

By: Ethan S. Bernstein

The Managing Human Capital course has been specifically designed to teach practical skills for the future general manager (not just the human resource practitioner) who seeks to manage both other people and her or his own career with optimal... View Details

January 2022
Article

The Private Impact of Public Data: Landsat Satellite Maps Increased Gold Discoveries and Encouraged Entry

By: Abhishek Nagaraj

How does public data shape the relative performance of incumbents and entrants in the private sector? Using a simple theoretical framework, I argue that public data reduces investment uncertainty, facilitates the discovery of new market opportunities and increases the... View Details

Keywords: Public Data; Maps; Gold; Microeconomic Behavior; Economics; Data and Data Sets; Private Sector; Market Entry and Exit; Mining

October 2002 (Revised October 2005)
Case

United Parcel Service's IPO

By: Paul M. Healy, Brett Laschinger and Ajay Shroff

Examines the valuation of United Parcel Service (UPS) at the time of its IPO in mid-1999. Offers students the opportunity to assess UPS's current performance relative to its major competitor, Federal Express (FedEx), and to judge whether that performance is... View Details

Keywords: Initial Public Offering; Valuation; Performance Evaluation; Competition; Shipping Industry; Georgia (state, US)

May 2010
Article

Elections and Discretionary Accruals: Evidence from 2004

By: Karthik Ramanna and Sugata Roychowdhury

We examine the accrual choices of outsourcing firms with links to U.S. congressional candidates during the 2004 elections, when corporate outsourcing was a major campaign issue. We find that politically connected firms with more extensive outsourcing activities have... View Details

Keywords: Political Economy; Accounting Information; Accruals Management; Campaign Contributions; Discretionary Accruals; Election Outcomes; Political Currency; Political Process; Social Issues; Political Elections; Job Cuts and Outsourcing; Motivation and Incentives; Earnings Management; Welfare; United States

October 2009 (Revised January 2010)
Case

The University of Notre Dame Endowment

By: Andre F. Perold and Paul Michael Buser

The Endowment Model of Investing, which was based on creating high risk-adjusted performance through diversification, a long time horizon, top-notch outside managers, and illiquid investments, had served Notre Dame and other large universities well over the past... View Details

Keywords: Financial Crisis; Higher Education; Asset Management; Private Equity; Financial Liquidity; Investment; Risk Management; Performance Evaluation; Education Industry; Financial Services Industry

2023
Working Paper

Cost-Efficient Decarbonization of Portland Cement Production

By: Gunther Glenk, Anton Kelnhofer, Rebecca Meier and Stefan Reichelstein

Accounting for nearly 8% of global annual carbon dioxide (CO2) emissions, the cement industry is considered difficult to decarbonize. While a sizeable number of abatement levers for Portland cement production is becoming technologically ready for deployment, many are... View Details

September 2004 (Revised February 2007)
Case

Roller Coaster Ride, The: The Resignation of a Star

By: Boris Groysberg, Steve Balog and Jennifer Haimson

Presents a detailed account of power dynamics that unfold in the firm when one of its best and brightest threatens to leave. Focuses on the dynamics of attracting, retaining, compensating, negotiating, and leveraging a star performer in a professional services firm. A... View Details

Keywords: Talent and Talent Management; Compensation and Benefits; Resignation and Termination; Retention; Business or Company Management; Negotiation; Power and Influence

March 2014
Article

Search Diversion and Platform Competition

By: Andrei Hagiu and Bruno Jullien

Platforms use search diversion in order to trade off total consumer traffic for higher revenues derived by exposing consumers to unsolicited products (e.g., advertising). We show that competition between platforms leads to lower equilibrium levels of search diversion... View Details

Keywords: Market Intermediation; Search; Two-Sided Markets; Platform Design; Platform Competition; Competition; Two-Sided Platforms

29 Nov 2021
Research & Ideas

How Bonuses Get Employees to Choose Work Over Family

choose to spend time with—work colleagues or family—based on how their pay is structured, in particular whether they get bonuses for a job well done or earn fixed salaries regardless of performance. In fact, employees who received View Details

Keywords: by Rachel Kim Raczka

07 Jul 2008
Research & Ideas

Innovation Corrupted: How Managers Can Avoid Another Enron

including the effective use of stock-based compensation and comparative performance measures, and the need to balance turbocharged incentives with turbocharged controls. “Enron's leaders perpetuated a kind... View Details

Keywords: by Martha Lagace; Energy; Utilities

April 2010 (Revised September 2011)
Case

Supply Chain Partners: Virginia Mason and Owens & Minor (A) (Abridged)

By: V.G. Narayanan and Lisa Brem

Owens & Minor (O&M) performed lean inventory services for Virginia Mason (VM) as its Alpha Vendor, but the outdated industry pricing model created perverse incentives and could not capture O&M's costs. Together, O&M and VM created an activity-based pricing model: Total... View Details

Keywords: Supply Chain Management; Partners and Partnerships; Activity Based Costing and Management; Business Model; Non-Governmental Organizations; Nonprofit Organizations; Motivation and Incentives; Asset Pricing; Cost Accounting; Fair Value Accounting; Medical Devices and Supplies Industry

2010
Working Paper

Corporate Governance When Founders Are Directors

By: Feng Li and Suraj Srinivasan

We examine CEO compensation, CEO retention policies, and M&A decisions in firms where founders serve as a director with a non-founder CEO (founder-director firms). We find that founder-director firms offer a different mix of incentives to their CEOs than other firms.... View Details

Keywords: Business Startups; Governing and Advisory Boards; Executive Compensation; Retention; Managerial Roles; United States

November 2005 (Revised July 2006)
Background Note

Understanding Economic Value Added

By: Mihir A. Desai, Fabrizio Ferri and Steve Treadwell

Explores the concept of economic value added (EVA) and its practical applications as a management control system for performance measurement and incentive compensation. Explains how EVA is measured and explores some of the adjustments to financial statements that are... View Details

Keywords: Value

Regular handwashing with soap is believed to have substantial impacts on child health in the developing world. Most handwashing campaigns have failed, however, to establish and maintain a regular practice of handwashing. Motivated by scholarship that suggests... View Details

09 Nov 2011
Working Paper Summaries

CEO Bonus Plans: And How to Fix Them

Keywords: by Kevin J. Murphy & Michael C. Jensen

Overcoming Overconfidence: Teamwork and Self-Control

This paper analyzes interactions between agents who are overconfident regarding their own future self-control relative to others. The paper considers the problem of incentivizing several such agents, and compares two methods: assigning work individually to each... View Details

2011
Working Paper

CEO Bonus Plans: And How to Fix Them

By: Kevin J. Murphy and Michael C. Jensen

Almost all CEO and executive bonus plans have serious design flaws that limit their benefits dramatically. Such poorly designed executive bonus plans destroy value by providing incentives to manipulate the timing of earnings, mislead the board about organizational... View Details

Keywords: Business Earnings; Competency and Skills; Cost of Capital; Executive Compensation; Risk Management; Performance Evaluation; Projects; Motivation and Incentives; Value