Publications

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2021
Working Paper

Going by the Book: Valuation Ratios and Stock Returns

By: Ki-Soon Choi, Eric So and Charles C.Y. Wang

We study the use of firms’ book-to-market ratios (B/M) in value investing and its implications for comovements in firms’ stock returns and trading volumes. We show B/M has become increasingly detached from common alternative valuation ratios over time while also... View Details

Keywords: Valuation Ratios; Book-to-market Ratios; Investment Return; Investment; Decision Making

SSRN

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September 2006 (Revised August 2007)
Case

The Dubai Ports World Debacle and its Aftermath

By: Julio J. Rotemberg

Describes the political ramifications in the United States of Dubai-based DP World's acquisition of London-based Peninsular and Oriental Steam Navigation Company (P&O). Because P&O operated some port terminals in the United States, DP World obtained clearance from the... View Details

Keywords: Foreign Direct Investment; Multinational Firms and Management; Governing Rules, Regulations, and Reforms; Government Legislation; National Security; Business and Government Relations; Ship Transportation; Dubai; United States

July 2001 (Revised October 2001)
Case

Policy Management Systems Corp.: The Financial Reporting Crisis

Tim Williams, the new CFO of a publicly-traded enterprise software company, attempts to rebuild his company's reputation for reliable financial reporting following a highly visible financial reporting crisis. The crisis begins with an earnings shortfall warning, which... View Details

Keywords: Accrual Accounting; Revenue Recognition; Capital Markets; Policy; Corporate Governance; Accounting Audits; Technology Industry

2023
Working Paper

How Wicked Problems Drive Business Performance: A Review of the Academic Literature

By: Caroline Adelson, Charlotte Kuller, Cate Tompkins, Ellora Sarkar, Samantha Price and Marco Iansiti

Recent years have seen a rise in the number of businesses engaged in the pursuit of “purposeful” activities – that is, activities that engage with the broader community in ways that expand beyond the pursuit of shareholder value. Many of these activities involve... View Details

Keywords: Wicked Problems; Corporate Social Responsibility and Impact; Social Issues; Performance

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January 2005 (Revised March 2008)
Case

Kohler Co. (A)

Kohler Co., best known for its plumbing fixtures, is a large, private family firm. As part of a recapitalization aimed at preserving family ownership of Kohler Co., nonfamily shareholders, who held 4% of common stock, were required to sell their shares to the company.... View Details

Keywords: Family Business; Capital Structure; Cash Flow; Stocks; Price; Family Ownership; Business and Shareholder Relations; Valuation

In this book we study the evolution of corporate governance arrangements that governments have adopted for their state-owned enterprises (SOEs) in the last 20 years. We show that the process of privatization and liberalization of the 1990s and early 2000s created... View Details

Program

Mergers and Acquisitions

your company is private or public, or looking to buy or to sell, you will emerge with new ability to broker powerful deals and create shareholder value. Key Benefits Completing a successful merger or acquisition is a multifaceted project... View Details

Program

Preparing to Be a Corporate Director

your awareness of current and emerging issues facing boards and companies Balance the demands of shareholders with those of other stakeholders in driving long-term corporate performance Interact more effectively with your company's board... View Details

17 Jul 2023
Research & Ideas

Money Isn’t Everything: The Dos and Don’ts of Motivating Employees

because the payout incentives are tied to leading only your company’s sector. “It’s paying for real performance, which is the thing the shareholders want,” Hall says. Do: Remember that cash isn’t always king Non-monetary rewards can be... View Details

Keywords: by Avery Forman

April 2009 (Revised August 2009)
Case

Petrobras in Ecuador (A)

By: Aldo Musacchio, Lena G. Goldberg and Ricardo Reisen de Pinho

On October 18, 2007, Ecuador's President Rafael Correa announced his intention to migrate Petrobras' existing participation contracts to exploit oil reserves in Ecuador's Blocks 18 and 31 to servicing agreements under which Petrobras would be paid a production fee and... View Details

Keywords: Metals and Minerals; Globalized Firms and Management; Corporate Governance; Government Administration; Taxation; Contracts; Negotiation Process; Negotiation Tactics; Public Ownership; Business and Government Relations; Business and Shareholder Relations; Brazil; Ecuador

July 2017
Article

What Do Measures of Real-Time Corporate Sales Tell Us About Earnings Surprises and Post-announcement Returns?

By: Kenneth A. Froot, Namho Kang, Gideon Ozik and Ronnie Sadka

We develop real-time proxies of retail corporate sales from multiple sources, including approximately 50 million mobile devices. These measures contain information from both the earnings quarter (within quarter) and the period between that quarter's end and the... View Details

Keywords: Announcements; Business Earnings; Sales; Retail Industry

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October 2014
Article

Good Cop, Bad Cop: Complementarities Between Debt and Equity in Disciplining Management

By: Alexander Guembel and Lucy White

In this paper we examine how the quantity of information generated about firm prospects can be improved by splitting a firm's cash flow into a "safe" claim (debt) and a "risky" claim (equity). The former, being relatively insensitive to upside risk, provides a... View Details

Keywords: Information; Borrowing and Debt; Equity; Corporate Finance

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June 2004
Case

Aventis SA (A): Planning for a Merger

By: Joshua D. Margolis and Carin-Isabel Knoop

Eight executives at Hoechst and Rhone-Poulenc must make four crucial decisions on the eve of merging their companies to become Aventis--what would become the world's third largest pharmaceutical firm. In addition to formulating a vision and strategy, the two firms must... View Details

Keywords: Problems and Challenges; Mergers and Acquisitions; Horizontal Integration; Organizational Design; Organizational Culture; Pharmaceutical Industry; United States

In 2014, the Allergan Inc. board of directors received a surprise takeover offer from Valeant Pharmaceuticals in alliance with hedge fund activist Bill Ackman's Pershing Square Capital Management. In the unprecedented arrangement between an acquirer and a hedge... View Details

Value Shift

Today, corporate accountability is as vital to the bottom line as an effective business model. Value Shift makes a strong case for the merits of corporate responsibility and shows how a value-positive orientation contributes to superior performance through... View Details

June 2015
Supplement

Generating Higher Value at IBM (A): EPS Forecasting Model

By: Benjamin C. Esty and Scott Mayfield

This case analyzes IBM's financial performance and its capital allocation decisions over a 10-year period from 2004-2013, during which IBM returned more than $140B to shareholders through a combination of dividends and share repurchases. During this time, CEO Sam... View Details

Keywords: Dividends; Share Repurchases; Earnings Guidance; Financial Statement Analysis; Financial Ratios; Payout Policy; Earnings Per Share (EPS); Earnings Management; Change Management; Leadership; Transformation; Financial Strategy

09 Aug 2017
News

Non-Executive Directors Need To Align With Managers -- Without Losing Their Independence

Program

Growing as a Purposeful Leader

life Define a corporate purpose beyond creating shareholder value, or, if you already have an established purpose, assess its effectiveness Reflect your company purpose in its strategies and activities Incorporate purpose into... View Details

January 2020
Article

Compensation Consultants and the Level, Composition, and Complexity of CEO Pay

By: Kevin J. Murphy and Tatiana Sandino

We provide fresh evidence regarding the relation between compensation consultants and CEO pay. First, firms that employ consultants have higher-paid CEOs—this result is robust to firm fixed effects and matching on economic and governance variables. Second, while this... View Details

Keywords: Consultants; Benchmarking; Incentive Pay; Executive Compensation; Complexity; Motivation and Incentives; Governance