March 31, 2009

By Roey Gilberg

Scholars from institutions around the country convened at the ninth annual Strategy and Business Environment Conference on March 6-7. Hosted by UCLA Anderson, the scholars came together to present and discuss research papers, covering topics relating to businesses and the various environments in which they operate.

The prestigious conference was inaugurated in 2000 at the Wharton School of the University of Pennsylvania. Since then, it has been hosted by several other schools, including Harvard Business School and Stanford's Graduate School of Business. After last year's conference was held at Duke University's Fuqua School of Business, UCLA Anderson took its first turn playing host this year.

"It's one of the better smaller conferences in strategy," says Jason Snyder, an assistant professor in the Policy group at UCLA Anderson and a member of the conference committee.  "Hosting it really raises our profile -- it enables us to recruit faculty, to show that Anderson is a great place to send promising Ph.D. students, and to introduce our Ph.D. students to the world."

One such Anderson student is Suresh Muthulingam, who co-authored the paper, "Managerial Biases and Energy Savings: An Empirical Analysis of the Adoption of Process Improvement Recommendations," along with UCLA Anderson professors Charles Corbett and Shlomo Benartzi, as well as Professor Bohdan Oppenheim of Loyola Marymount. The paper, presented during the session, "Strategy and the Natural Environment," seeks to explain why managers of firms do not implement many profitable energy efficiency initiatives.

For their research, the authors studied data from a U.S. Department of Energy program, in effect since 1976, which offers small and medium sized businesses specific recommendations as to how they can improve their energy efficiency in a cost effective way.

"The initiatives offered are quite profitable, but only about half are implemented," says Muthulingam.  Among their findings, the authors concluded that managers tend to be short sighted and that they seem to overemphasize cost in their decision making processes. They also found that the sequence in which the recommendations are listed affect which ones are implemented.

Since 1980, which marks the earliest available data, total savings of approximately $1.79 billion (through 2006) have been identified by the program, and only about $0.63 billion have actually been implemented, according to Muthulingam. "Energy saving is a critical focus area for the U.S. economy at present," he says.  "Studies like this go a small way in seeing what we can do."

Muthulingam will graduate with his Ph.D. this June, after which he will join the faculty at Cornell University's Johnson Graduate School of Management.

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