“The best time to plant a tree is 20 years ago. The next best time is today.”
This ancient Chinese proverb applies to ideas as well as habits. A seed planted today can spark change; a seed planted decades ago can disrupt an entire industry.
Faculty experts from the Fox School demonstrate the impact that a single idea can have—from a 1999 article that launched a new research topic in workplace incivility to a 2017 analysis about the U.S.-Cuba trade embargo that takes a deep dive into presidential power. With the passage of time, it’s clear that these catalytic research papers have transformed their fields.
Setting international standards
Do accountants trust good news? Sudipta Basu, associate dean of research and doctoral programs and professor of accounting, captures accountants’ tendency to require more verification to confirm manager-reported ‘good news’ than ‘bad news’ while determining the reported value of an asset in his 1995 thesis.
Traditional conservatism encourages anticipating possible future losses but not future gains while producing financial statements, thus reducing the risk of overestimating a firm’s value. The “Basu models” counteract managers’ reporting biases, who can get larger bonuses and promotions by disclosing good news but hiding bad news. His research influenced the International Accounting Standards Board, which sets accounting standards for over 100 countries.
“As we approach the next millennium, we face the growing challenge of relationships mediated by high-tech, asynchronous, global interactions,” wrote Lynne Andersson, associate professor of human resource management, in 1999. “Historians may view the dawn of the 21st century as a time of thoughtless acts and rudeness.” Nonchalantly breaking appointments, neglecting to say please, talking loudly about personal matters in the workplace—these nuisances, she argues, were precursors to a larger problem.
Andersson’s research launched the entire field of study in workplace incivility. She identified that subtle acts of mistreatment in organizations can potentially spiral to increasingly aggressive behaviors. Andersson argued that a person’s hot temperament and an informal work culture facilitate the escalation of arguments, which can eventually affect the whole organization.
All in the family
In the 1990s, conventional wisdom held that businesses owned by the original founding families typically performed worse than other firms. Ron Anderson, dean of the Fox School of Business and professor of finance, disproved that belief with his 2003 paper, “Founding-Family Ownership and Firm Performance: Evidence from the S&P 500.”
Despite prior literature finding that founding-family ownership was an ineffectual way to organize a business for peak financial performance, Anderson found that family firms performed better than nonfamily firms. Plus, firms with a family member acting as CEO had even greater profitability. “One interpretation is that the family understands the business,” says Anderson, “and that involved family members view themselves as stewards of the firm.”
What makes a successful crowdfunding project? As the popularity of the platform grew over the decades, Sunil Wattal, managing director of the PhD programs, and Gordon Burtch, PhD ’13, sought to understand backers’ behaviors. What they found has helped shape crowdfunding since 2013.
These co-authors from the Department of Management Information Systems discovered that the amount and timing of others’ contributions significantly influenced crowdfunders while making funding decisions. They saw that projects that have already received ample amount of funds may be negatively affected, as contributors believed their donation may not be valued as much by the recipient. Their study has affected how project managers decide to share information and market their efforts to achieve success.
Creating an innovation network
The competitive advantage of a company heavily depends on its “innovation networks” – the people or firms outside of the organization that can help it solve problems and find inventive ideas to bring new products to the marketplace. Arvind Parkhe and Charles Dhanaraj of the Department of Strategic Management presented a set of actions that companies can take to ensure maximum value creation from this network.
They introduced three interrelated processes—knowledge mobility, innovation appropriability and network stability—that can improve the efficiency of the innovation network. High mobility increases the ease with which knowledge is shared, acquired and used. Innovation appropriability allows equal distribution of the value created to all the contributors. The combination of these processes ensures network stability, which promotes continuous collaboration and maximizes value creation for everyone involved.
Take a quick look at more research that has changed industry and academia over the decades:
- Sanat K. Sarkar of Statistical Science wrote a series of articles in 1997-98 that first proved a conjecture related to the Simes test, one of the more powerful methods used in the context of testing multiple hypotheses. Sarkar’s research broadened the scope of the Simes test’s use to a wide range of statistical investigations.
- In 1999, David Cummins and Mary Weiss of Risk, Insurance and Healthcare Management studied the relationship between mergers and acquisitions, efficiency, and scale economies in the life insurance industry. Their research illuminated the actions that companies like GEICO took to become dominant in the market.
- Susan Mudambi of the Department of Marketing and Supply Chain Management and David Schuff of the Department of Management Information Systems evaluated the perceived helpfulness of online reviews in 2010, offering insights gleaned from the first several years of Amazon reviews.
- In 2017, Kevin Fandl of the Department of Legal Studies studied Congress’s 1996 U.S.-Cuba embargo, which he argues unconstitutionally interferes with the U.S. President’s powers as the nation’s diplomat-in-chief. He takes a deep dive into the presidential power to act independent of Congress, an issue of significance in many areas of policy today.