Originally published in听Carroll Capital, the print publication of the Carroll School of Management at Boston College. .听
Carroll School researchers have lately investigated business questions ranging from the micro鈥攈ow does one maintain a career identity amid life鈥檚 unpredictability?鈥攖o the macro鈥攄o companies avoid mergers that could annoy their customers? If anything unites this work, it鈥檚 the idea that the business world seldom operates as you鈥檇 expect.听
Making Sweet Music of Messy Careers
Careers, like our messy lives, are complicated. A career might be summarized in a tidy narrative, yet can come with side gigs, sabbaticals, and second acts. Put simply, it can change, and that creates tension as someone puzzles out a career identity. In a paper published in the , Management and Organization Professor Jamie Ladge and colleagues put forward a theory that reconciles the anchoring effect of an enduring identity with the day-to-day reality of unexpected events and evolving skills. Under their听formulation, people continually both maintain and modify their career identity. They mentally balance whatever they see as their career through line with new opportunities and unexpected detours. This process鈥攃alled career identifying鈥斺�渁llows individuals to adapt and accommodate a wide variety of career-related thoughts and actions while also holding a stable enough self-definition to serve as a reference point,鈥� the coauthors write.
The Dirty Business of Being Green听
Companies are like people: They want to look good. If they can do that easily, so much the better. For example, Coughlin Family Professor of Finance Ran Duchin and colleagues have shown that, when pressured to be more sustainable, public companies don鈥檛 necessarily cut their pollution. Instead they sometimes just sell off their polluting plants to their suppliers. And sure, the sellers do end up seeming greener鈥攖heir operations appear less polluting since the dirty plants move off their books鈥攂ut the world remains just as smoggy as before. Duchin and coauthors write in the that this conduct smacks of greenwashing, in which companies try to look more sustainable without making real changes, so their 鈥渄ivestment of pollutive plants reflects a cosmetic redrawing of firm boundaries.鈥澨� The researchers also find that corporate greenwashers can be shameless: Sellers will often talk up their commitment to sustainability in conference calls with investors after they鈥檝e sold off polluting plants.
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Putting Words in Their Mouths听
If a friend were to post on social media about a brand experience they had, you鈥檇 probably think the content was their own. Think again. Some companies are now creating content for consumers to share鈥攇oing beyond the standard practice of simply asking consumers to post about their experience. That can work remarkably well, according to an article by Accenture Professor of Marketing Katherine N. Lemon and coauthors in the . They refer to this as 鈥渇irm-generated user content,鈥� or FGUC鈥攃rafted for consumers 鈥渢o share as their own.鈥� In one of several lab and field studies, the researchers compared a typical request for consumer-generated content鈥斺�淧lease consider posting about us on Twitter [X]鈥濃�攚ith an FGUC that commended the product or service. The basic findings: Provided content 鈥渋ncreases the likelihood that consumers share a post about their experience, by making the sharing process easier,鈥� while also tempering negative opinions and thus lessening the chances of dissatisfied consumers sharing posts.
Does Pay Complexity Intoxicate CEOs?听
With alcoholic beverages, moderation is key. That goes also for the features of executive pay plans, as Joseph L. Sweeney Chair and Professor of Accounting Mary Ellen Carter and colleagues find. With too many pay-plan features, as with too many drinks, CEOs can lose their bearings. Yet corporate pay plans are becoming ever more complicated, Carter and coauthors report in the . From 2006 to 2019, corporate boards added more of everything鈥攌inds of pay (stock options, restricted stock, etc.), performance targets and measurement periods, and benchmarks. They were trying to better link pay to performance, but companies mostly ended up doing worse as CEOs paid attention to too many metrics and lost sight of what鈥檚 important. The researchers offer a warning: 鈥淥ur study suggests that compensation contracts that include features that may be optimal individually can become suboptimal overall when many features are aggregated.鈥�
Don't Let a Crisis Go to Waste听
A big data breach doesn鈥檛 just embarrass a company. It also says its IT systems can鈥檛 ward off hackers. When firms learn that, they do the sensible thing and hire more cybersecurity experts, especially in management and monitoring roles, according to Business Analytics Professor Sebastian Steffen and colleagues. Breached firms bring in more public relations staffers, too, the researchers find in an paper鈥攚hich underscores the reputational damage that big hacks can cause. Interestingly, the PR hires happen quickly鈥攑erhaps as companies scramble to reassure customers and investors amid a crisis鈥攚hile听the cybersecurity ones don鈥檛 come till several months later. Little research had examined hiring after big hacks because data was scarce. By combining information from several sources, Steffen and coauthors were able to link breaches and companies鈥� staffing responses.听
Keep Your Friends Close and Your Customers Closer听
Not annoying your customers would seem a commandment of business. Yet that simple idea can manifest in surprising ways. Take mergers and acquisitions. Accounting Professor and Clark Family Fellow Benjamin Yost, with colleagues including Farzana Afrin, Ph.D. 鈥�22, show that firms don鈥檛 just consider themselves when pondering mergers and acquisitions. They also think about their customers鈥攏ot consumers, but companies they do business with. Yost and his coauthors find that companies avoid pairing up with customers鈥� rivals or the suppliers to those rivals, because these mergers would put their customers at a competitive disadvantage. Mergers entail extensive exchange of information between the parties, and sensitive details about the customers could be shared鈥攚hich the rivals or suppliers then could use to undercut the customer. 鈥淪uppliers who undertake such mergers risk damaging or losing their existing relationships with their customers,鈥� the researchers write in the .
This Free Advice May Cost You听
In the world of corporate governance, proxy advisory firms loom large. They produce reports on public companies鈥� governance and make recommendations about how shareholders should vote in corporate elections on questions like who should serve on the board. Investors and researchers have long debated the worth of their reports and advice. Hillenbrand Family Faculty Fellow Andrey Malenko, Wargo Family Faculty Fellow Nadya Malenko, and a colleague argue in the that proxy advisors' reports do have value, but their voting recommendations should be interpreted in light of their desire to sell those reports. Advisors, the finance professors say, want to stir up controversy because doing that creates greater demand for their reports. So they鈥檒l often make voting recommendations, which they give away for free, that contradict a corporate vote鈥檚 likely outcome (typically the one favored by management of the company holding the vote). In short, they鈥檒l use their voting tips to gin up sales of their reports.
