Exec Reading

Straight-Talk About Workplace Wordplay
Samuel Culbert, Professor of Human Resources & Organizational Behavior

Everyone says straight-talk is the ultimate effectiveness enhancer but everyone also complains they don’t get it nearly enough. We’ve all heard and probably made the classic office complaint, “all the bullsh*t I have to put up with at work.” But few of us see that our frustrations are the result of limitations in how we view events or realize that, for others, we are a source of baloney. Few workplace challenges are as vexing as figuring out the difference between good business communications and the kind of verbal fog that slows down production, hampers creativity, and creates misunderstandings among teammates.

Brand Extensions Hold More Promise than Peril: Parent Brands Tend to Withstand Failed Extensions
Kevin Lane Keller & Sanjay Sood

More and more firms realize that some of their most valuable assets are the brand names associated with their products or services. Creating, maintaining, and enhancing the strength of those brands has become a key management imperative. One important advantage of having a strong brand is that it can facilitate acceptance of new products launched using that brand name, i.e., brand extensions. Because they reduce consumer risk and significantly lower the cost of introductory marketing programs, brand extensions have become the predominant new product strategy, and the last two decades have seen an explosion in the number of brand extensions.

What Reporting Officers Should Know About FAS 123
Richard Roll

The Financial Accounting Standard Board's (FASB) revised FAS 123 establishes financial accounting and reporting standards for stock-based employee compensation plans. It mandates that public and private corporations must expense the value of employee stock options in their financial statements for fiscal years beginning after June 15, 2005.

Why do brand managers (not) react when attacked? And does it matter?
Jan-Benedict E.M. Steenkamp, Vincent R. Nijs, Dominique M. Hanssens and Marnik G. Dekimpe

How do competitors react to each other’s price-promotion and advertising attacks? What are the reasons for the observed reaction behavior? We answer these questions by performing a large-scale empirical study on the short-run and long-run reactions to promotion and advertising attacks in over 400 consumer product categories over a four-year time span.

Corporate Governance, Risk & Inequality in Japan and the United States
Sanford M. Jacoby

Corporate governance is an esoteric topic to which most Americans pay little attention, even after the business scandals of the last few years. Yet corporate governance is of vital importance for those Americans who work for corporations, own stock in them, or are affected by their decisions. That includes nearly everyone, because corporate decisions influence everything from the food you eat to the air you breath. So, what exactly is corporate governance? It comprises the laws and practices by which managers are held accountable to those who have a legitimate stake in the corporation.

What in the World is Competitive Advantage?
Richard P. Rumelt

In recent years the concept of competitive advantage has taken center stage in discussions of business strategy. Statements about competitive advantage abound, but a precise definition is elusive. In reviewing the use of the term competitive advantage in the strategy literature, the common theme is value creation. However, there is not much agreement on value to who, and when.

The Dual Theory of Human Resource Management and Business Performance: Lessons for HR Executives
David Lewin

Contemporary human resource management research, including studies based on North American, European and Asian data, finds that certain “high involvement” type HR practices have significant positive effects on such business performance measures as market value, rate of return on capital employed, revenue growth, revenue per employee, productivity, product/service quality, and even organizational survival. Another way to achieve enhanced business performance is by managing human resources for expense control. Consequently, certain “low involvement” HR practices may best fit some organizations and employees.

Using Behavioral Economics to Improve Diversification in 401(k) Plans: Solving the Company Stock Problem
Shlomo Benartzi and Richard Thaler

Investors in 401(k) plans often have very naïve notions of diversification. For example, in past research we have found that some employees use a simple “1/n rule”: if there are five investment funds, they invest 20 percent in each fund regardless of its risk and return profile. This strategy can lead to poor diversification if the funds in the plan are mostly of one type.