Business Commons^™

Brigham Young University Marriott School Global Management Center: Study Abroad Program Marketing Research Project, Paul Bryan, John Park, Sam Schmidt

Student Works

The BYU Marriott School has endless opportunities for its students, both graduate and undergraduate. Within the Marriott School, the Global Management Center provides study abroad programs for graduate and undergraduate Marriott School students. These programs enable students to visit different countries, to learn a different culture, to network with foreign companies, and to bestow a better understanding of international business. At the request of Kristie Seawright, associate professor in the Global Management Center, students of the Marriott School of Management located at Brigham Young University have been asked to conduct a research project to determine specific ways to improve the …

Are Empowerment And Education Enough? Underdiversification In 401(K) Plans, James J. Choi, David Laibson, Brigitte C. Madrian

Faculty Publications

At the end of 2000, current and former employees of the energy trading company Enron Corporation held $2.1 billion in the firm’s 401(k) retirement savings plan. Sixty-two percent of that money was invested in Enron stock, then trading at $83 a share. In October 2001 Enron’s finances began to unravel as its accounting improprieties came to light. Enron stock plummeted over the next several weeks, and on December 2, 2001, the company declared bankruptcy, rendering its shares worthless. Thousands of Enron employees lost their jobs and a large fraction of their retirement wealth simultaneously.

Property Taxation Of Multifamily Housing: An Empirical Analysis Of Vertical And Horizontal Equity, Gary C. Cornia, Barrett A. Slade

Faculty Publications

This paper analyzes the uniformity of the property appraisal outcome for multifamily apartment complexes in Phoenix, Arizona. Specifically, it investigates vertical and horizontal equity and equity across assessment methods. Apartment transactions and assessed valuations are examined over a fiveyear period (1998–2002). Once possible bias in model specification is accounted for, no evidence of vertical inequity in the sample is found. However, there is modest evidence of horizontal inequity: the results suggest that complex size and geographic location are more difficult for the assessor to value uniformly. There is also inequity between small and large properties, as represented by two different …

Creating Breadth In Business Education Through Service-Learning, Paul C. Godfrey, Louise M. Illes, Gregory R. Berry

Faculty Publications

We argue service-learning pedagogy and the associated educational experiences provide a partial solution to the significant problem of narrowness in business education. Servicelearning pedagogy seeks to balance academic rigor with practical relevance, set in a context of civic engagement, which furnishes students with a broader and, we argue, richer, educational experience. We present four specific critiques of business education: (1) the business curriculum focuses on functional and discrete rather than cross-functional and holistic knowledge; (2) coursework emphasizes practical problem-solving “tool kits” rather than deep theoretical knowledge; (3) the underlying paradigm of business education views humanity and human interactions in purely …

Leadership, Collective Personality, And Performance, David A. Hofmann, Lisa Jones Christensen

Faculty Publications

By viewing behavior regularities at the individual and collective level as functionally isomorphic, a referent-shift compositional model for the Big 5 personality dimensions is developed. On the basis of this compositional model, a common measure of Big 5 personality at the individual level is applied to the collective as a whole. Within this framework, it is also hypothesized that leadership (i.e., transformational, transactional, and passive) would predict collective personality and that collective personality would be significantly related to collective performance. The results supported these hypotheses using a sample of franchised units. On the basis of recent research at the individual …

Job Demands And Job Search Among High-Level Managers In The United States And Europe, John B. Bingham, Wendy R. Boswell, John W. Boudreau

Faculty Publications

High-level managers are often faced with challenging demands at work, and much of the managerial development literature has researched the responses to these challenges. The authors propose an extension to this research by investigating the influence of challenge-related and obstacle- related job demands on job search among a sample of U.S. managers and a sample of international managers. Specifically, the authors propose divergent relationships among job search and the type of job demands managers experience, and we also explore the mediating effect of job satisfaction. The authors’ study provides further insight into the complexities of managerial responsibilities and their behavioral …

Passive Decisions And Potent Defaults, James J. Choi, David Laibson, Brigitte C. Madrian, Andrew Metrick

Faculty Publications

Default options have an enormous impact on household choices. Such effects have now been extensively documented in the literature on 401(k) plans (Madrian and Shea 2001; Choi et al. 2002b, 2004). Defaults have been shown to affect participation, savings rates, rollovers, and asset allocation. For example, Choi et al. (2004) study three firms that use automatic enrollment. When employees at these firms are automatically enrolled in their 401(k) plan, only a tiny fraction opt out, producing participation rates exceeding 85 percent regardless of tenure. But when employees at these firms were not automatically enrolled, participation rates were significantly lower, ranging …

Can Individual Investors Beat The Market?, Joshua D. Coval, David A. Hirshleifer, Tyler Shumway

Faculty Publications

We document strong persistence in the performance of trades of individual investors. The correlation of the risk-adjusted performance of an individual across sample periods is about 10 percent. Investors classified in the top performance decile in the first half of our sample subsequently outperform those in the bottom decile by about 8 percent per year. Strategies long in firms purchased by previously successful investors and short in firms purchased by previously unsuccessful investors earn abnormal returns of 5 basis points per day. These returns are not confined to small stocks nor to stocks in which the investors are likely to …

Measuring Organizational Safety And Effectiveness At Nasa, Daniel S. Wong, Vinit M. Desai, Peter Madsen, Karlene H. Roberts, Anthony Ciavarelli

Faculty Publications

Many project managers may be fully aware of the safety risks within their organizations. What they may not know, however, is that many of these risks are caused by the underlying safety culture of the organization rather than human individual differences in the organization. This article argues that managers can mitigate safety risks by obtaining a better understanding of their organizations’ culture. The researchers created a management metric that enables engineering/project managers to identify positive and negative aspects of safety that are tied to their organizations’ cultures. The article presents a process that managers can use to increase safety and …

Perceptions Of The Teacher–Leader In Modern Society: Insights From The Master Teacher’S Pedagogy, Stanley E. Fawcett, James C. Brau, Amydee M. Fawcett

Faculty Publications

Meeting the challenges of a modern era, including corporate scandal, government gridlock, and societal turmoil, requires a high level of effective leadership. In such an environment, the teacher–leader plays a critical role in cultivating the knowledge worker and learning organization. After all, the teacher–leader leverages the human resource by challenging and inspiring people to bring forth their best efforts and ideas in the quest to identify and implement creative solutions to society’s dilemmas. To understand the opportunities and challenges encountered in the teacher–leader paradigm, the pedagogy of a prototypical teacher was modeled and evaluated. As the ideal model of the …

Equilibrium Underdiversification And The Preference For Skewness, Todd Mitton, Keith Vorkink

Faculty Publications

We develop a one-period model of investor asset holdings where investors have heterogeneous preference for skewness. Introducing heterogeneous preference for skewness allows the model's investors, in equilibrium, to underdiversify. We find suppport for our model's three key implications using a dataset of 60,000 individual investor accounts. First, we document that the portfolio returns of underdiversified investors are substantially more positively skewed than those of diversified investors. Second, we show that the apparent mean-variance inefficiency of underdiversified investors can be largely explained by the fact that investors sacrifice mean-variance efficiency for higher skewness exposure. Furthermore, contrary to the asset-pricing predictions of …

Stock Market Liberalization And Operating Performance At The Firm Level, Todd Mitton

Faculty Publications

I use firm-specific measures of openness to foreign investors to study the impact of stock market liberalization on firm-level operating performance. In a sample of over 1,100 firms from 28 countries, firms with stocks that are open to foreign investors experience higher growth, greater investment, greater profitability, greater efficiency, and lower leverage. Strategies to address potential endogeneity suggest that the observed relationship, at least in part, reflects a causal effect of openness on operating performance.

Dependability Auditing With Model Checking, Bonnie Anderson, James Hansen, Paul Benjamin Lowry

Faculty Publications

Model checking offers a methodology for determining whether a model satisfies a list of correctness requirements. We propose a theory of dependability auditing with model checking based on four principles: (1) The modeling process should be partitioned into computational components and behavioral components as an aid to system understanding; (2) The complex system will be abstracted to create a model; (3) A language must be available that can represent and evaluate states and processes that evolve over time; (4) Given an adequate model and temporal specifications, a model checker can verify whether or not the input model is a model …

Are Entrepreneurs Born Or Made? Views Of Entrepreneurs And Venture Capitalists, Ervin L. Black, F. Greg Burton, Anne M. Traynor, David A. Wood

Faculty Publications

What characteristics do entrepreneurs believe make them successful? We interview entrepreneurs and venture capitalists (VCs) to determine traits that each of these groups perceive as necessary for entrepreneurial success. We show that entrepreneurs cite traits inherent to their nature (for example, hard working, persistent, risk-taker) significantly more than VCs. We also test to see if entrepreneurs are able to identify factors that VCs consider most important for the funding decision. We find that entrepreneurs who do not have previous VC funding experience differ significantly from VCs in what factors are important for VC funding; whereas, entrepreneurs with previous VC funding …

Interaction Of New Section 362(E)(2) With Loss Disallowance Rules, Boyd C. Randall, Brian C. Spilker, John M. Werlhof

Faculty Publications

The American Jobs Creation Act of 2004 added Section 362(e)(2), which addresses concerns similar to those addressed by Section 336(d). Section 362(e)(2) was added to the law to close a perceived loophole whereby taxpayers could deduct a single economic loss twice by transferring loss property to a corporation in a Section 351 transaction or as a contribution to capital with the shareholder subsequently selling the stock and the corporation selling the loss asset. This provision was designed to prevent the recognition of a single economic loss twice. However, this new provision overlaps and interacts with the corporate liquidation loss disallowance …

A Semantic Web Data Retrieval Implementation With An Adaptive Model For Supporting Agent Decision Structures, James V. Hansen, James B. Mcdonald, Conan C. Albrecht, Douglas L. Dean, Bonnie B. Anderson

Faculty Publications

This paper proposes an adaptive learning approach that yields decision models that can be applied by a transactions agent. This model can learn effectively with a variety of data distributions. This research used the Semantic Web as a data access approach. The Semantic Web is a method that sellers can use to publish semantically meaningful information on Websites so that automated applications can reliably access that information. We implemented a Semantic Web composed of 30 vendors’ Web pages and a spider to search those pages to obtain product and vendor information. This information was used to train a learning agent, …

Real And Illusory Value Creation By Insurance Companies, David F. Babbel, Craig B. Merrill

Faculty Publications

One of the fundamental tenets of financial economics is that insurance companies, just as other financial and non-financial firms, have a very strong incentive to maximize current shareholder value.1 This seemingly simple observation leads to a wide variety of managerial behavior.2 In this article we will review a simple decomposition of the value of an insurance company. The decomposition illuminates the motivation for a variety of strategies that can be observed in practice. These strategies run the gamut from accounting manipulation through risk transfer schemes to positive net present value (NPV) “project” selection. We will review these in some detail …

Deception Detection Through Automatic, Unobtrusive Analysis Of Nonverbal Behavior, Thomas O. Meservy, Matthew L. Jensen, John Kruse, Judee K. Burgoon, Jay F. Nunamaker Jr., Douglas P. Twitchell, Gabriel Tsechpenakis, Dimitris N. Metaxas

Faculty Publications

Every day, hundreds of thousands of people pass through airport security checkpoints, border crossing stations, or other security screening measures. Security professionals must sift through countless interactions and ferret out high-risk individuals who represent a danger to other citizens. During each interaction, the security professional must decide whether the individual is being forthright or deceptive. This task is difficult because of the limits of human vigilance and perception and the small percentage of individuals who actually harbor hostile intent. Our research initiative is based on a behavioral approach to deception detection. We attempted to build an automated system that can …

Diversification And Focus: A Bayesian Application Of The Resource-Based View, Lee T. Perry, Mark H. Hansen, C. Shane Reese, Greggory Pesci

Faculty Publications

We propose a new application of the resource-based view (RBV) that is more consistent with Penrose's (1959) original framework. We use that framework to study the relationship between diversification and refocusing strategies and economic performance. We propose that the RBV may be enhanced by the explicit recognition of Penrose's two classes of resources, administrative and productive resources. This distinction suggests a focus on the administrative decisions of managers, including the multiple decisions associated with diversification and refocusing strategies, which lead to economic performance. Second, we argue that RBV theory is a theory about extraordinary performers or outliers, not averages. Therefore, …

Early Decisions: A Regulatory Framework, John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian

Faculty Publications

We describe a regulatory framework that helps consumers who have difficulty sticking to their own long-run plans. Early Decision regulations help long-run preferences prevail by allowing consumers to partially commit to their long-run goals, making it harder for a momentary impulse to reverse past decisions. In the cigarette market, examples of Early Decision regulations include restricting the locations or times at which cigarettes are sold, delaying the receipt of cigarettes following purchase, and allowing a consumer to choose in advance the legal restrictions on her own cigarette purchases. A formal model of Early Decision regulations demonstrates that Early Decisions are …

New Product Launch Decisions Under Competition And Uncertainty: A Real Options And Game-Theoretic Approach To New Product Development, James O. Ostler

Theses and Dissertations

New product development is central to many firms' future success. Not only as a means to continue to maintain their piece of the market, but product development can also be a strategic means for a company to diversify, and/or alter focus to adapt to changing market conditions.

Most of the research in new product development has been on how to do it cheaper and faster than the next guy. However, early commercialization does not guarantee a position of strength in the market. Failures of EMI in CT scanners and Xerox in personal computers illustrate that being first to market does …

Front Matter, Journal Of Microfinance

Journal of Microfinance / ESR Review

No abstract provided.

Foreign Exchange Risk Management Practices Of Microfinance Institution, Peter R. Crabb

Journal of Microfinance / ESR Review

Foreign exchange risk remains a significant problem for microfinance institutions (MFIs). Many sources of potential funding for MFIs remain untapped due to the high risks of currency devaluation faced by these funding sources. Specifically, debt capital is available for MFIs but foreign exchange risk is a potential deterrent. This paper reviews current practices in the management of foreign exchange risk for and by MFIs. The advantages and disadvantages of these practices are discussed and alternative practices proposed.

Vol. 06 No. 2 Journal Of Microfinance, Journal Of Microfinance

Journal of Microfinance / ESR Review

No abstract provided.

Impact Of Microfinance Programs On Children's Education: Do The Gender Of The Borrower And The Delivery Model Matter?, Nathalie Holvoet

Journal of Microfinance / ESR Review

This article highlights the effects particular features of microfinance programs have on childhood education. Using data from a South India household survey, the article examines how microfinance impacts schooling and literacy, how credit enters the household, and who brings it in. Regression results show that, in the case of direct bank-borrower credit delivery, it does not matter whether credit enters the household through the mother or the father. However, large differences occur when mothers obtain credit through women's groups. Analysis indicates that combined financial and social-group intermediation leads to higher educational inputs and outputs, mainly for girls. Individual interviewis with …

The Experience Of Financial Institutions In The Delivery Of Microcredit In The Philippines, Maria Abigail Carpio

Journal of Microfinance / ESR Review

This paper identifies the characteristic features of the different financial market players involved in the delivery of microcredit in the Philippines and looks into their experiences in addressing the credit demand of the small-borrower market segment, particularly the microenterprise sector. This paper argues that each group of lenders, specifically commercial banks, rural banks, credit-granting NGOs, and an apex financial institution, allocates its funds by establishing its own criteria for assessing the creditworthiness of borrowers and its own mechanisms to avoid borrower default. The delivery of microcredit takes place within an environment where the different financial market players face their own …

The Transformation Of The Microfinance Sector In India: Experiences, Options, And Future, M. S. Siriaram, Rajesh S. Upadhyayula

Journal of Microfinance / ESR Review

This paper discusses the growth and transformation of microfinance organizations (MFO) in India. Issues that have triggered transformation include size, diversity, sustainability, focus, and taxation. Transformation experiences in India are few. To move to the mainstream, non-governmental organizations (NGOs) choose from three popular forms of organizations: non-banking finance companies (NBFCs), banks, and cooperatives. It appears that there is no ideal path for spin-off. Regulatory changes are needed to allow MFOs to graduate to other legal forms as they grow organically. NGOs must be permitted to invest in the equity of MFOs, as is the case in Bolivia and Africa. Norms …

Realizing Mission Objectives: A Promising Approach To Measuring The Social Performance Of Microfinance Institutions, Katarzyna Pawlak, Michal Matul

Journal of Microfinance / ESR Review

This paper proposes a new approach for measuring the social performance of microfinance institutions. The key to developing sustainable social performance measurement (SPM) systems and practices is to consider their design from the perspective of the organizational mission. The fact that the SPM system is built on the organizational mission ensures its cost-effectiveness and facilitates its institutionalization. It not only stimulates an MFI to verify the fulfilment of its social mission and to innovate in the search for optimal solutions to address development needs in a given intervention context, but it also can improve its financial condition through client segmentation …

Microleasing: The Grameen Bank Experience, Asif Dowla

Journal of Microfinance / ESR Review

Grameen Bank was the first microfinance institution (MFI) to introduce microleasing on a large scale. This paper provides a preliminary evaluation of Grameen's leasing program. Instead of providing a full-fledged impact assessment study, we examine the terms and conditions of the leasing program and evaluate its success in terms of outreach, repayment rate, and asset ownership.Analysis of program level data shows that the program is successful in terms of outreach and repayment performance. Through the program, poor men and women have become owners of power tillers, power looms, shallow machines, cellular phones, and even computers. The success of leasing suggests …

Scoring Arrears At A Microlender In Bolivia, Mark Schreiner

Journal of Microfinance / ESR Review

Can scoring models help microlenders in poor countries as much as they have helped credit-card lenders in rich countries? This paper presents a scorecard that predicts the probability that loans from a microlender in Bolivia will have arrears of 15 days or more. Although arrears in microfinance depend on many factors difficult to include in scorecards, the paper shows that inexpensive, simple-to-collect data does have some predictive power. In micro-finance, scoring will not replace loan officers, but it can flag high-risk cases and act as a cross-check on loan officers' judgment.