Kelley School of Business (Indianapolis) Works
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Item Operational Risk and the New Caremark Liability for Boards of Directors(Boston University, 2023) Bird, Robert C.; Manning Magid, Julie; Kelley School of Business - IndianapolisThis paper identifies a new and previously unidentified trend that is changing corporate governance: board liability for misconduct based on operational risk. Operational risk is serious business. When boards slumber, hundreds of people die in airline accidents, pipelines explode causing massive environmental damage, and mines collapse leaving families with grief unimaginable. These and other corporate disasters were entirely preventable, and board members were asleep at the wheel while the conditions were set for disaster. This manuscript argues that courts are only now starting to fully recognize the peril of operational risk as a source of liability for boards of directors. Operational misconduct should take center stage alongside financial mismanagement as a critical source of director liability. After closely reviewing the key cases, this manuscript shows how operational risk heralds a fundamental shift in the way boards respond to monitoring the firm. This manuscript also identifies how subtle changes in judicial doctrine is changing the way boards manage operational risk, avoid liability, and protect the lives of stakeholders of the company and society at large.Item Drivers of Consumer Protection Practices: Implications for Operational Performance(Emerald, 2024-02) Awaysheh, Amrou; Klassen, Robert D.; Shafiq, Asad; Johnson, P. Fraser; Kelley School of Business - IndianapolisPurpose Globalization and increased outsourcing have contributed to increased supply chain complexity, exposing firms to greater vulnerability in the areas of product safety and supply chain security. Meanwhile, stakeholders pressure firms to ensure that their products are safe, and their supply chains are secure. Drawing from stakeholder theory, this paper aims to explore how the supply chain characteristics of distance and power affect the adoption of consumer protection (CP) practices, which ensure product safety and supply chain security. Design/methodology/approach Using primary survey data from a sample of Canadian manufacturing firms, this research examines the relationships among supply chain characteristics, adoption of CP practices and firm performance. Findings Analysis supported the use of two practices related to product safety (consumer education and product design) and three practices for supply chain security (packaging, tracking and authenticity). Greater cultural distance between the focal firm and its suppliers was positively associated with investments in safer design practices, while increased geographical distance between the focal firm and the customer was significantly related to increased consumer education. Moreover, as power of a focal firm relative to its suppliers increased, so too did investments in supply chain security. Finally, CP practices were related to improved operational performance along multiple dimensions. Originality/value This research focuses on the critical role of two key stakeholder groups in improving product safety and supply chain security: suppliers and customers. The authors add to the theoretical discussion of product safety and supply chain security by identifying critical differences between suppliers and customers for the focal firm. Second, the research informs the managerial community of the potential benefits of investments in CP practices.Item Do analysts’ target prices stabilize the stock market?(Springer Nature, 2023-10) Buxbaum, Markus; Schultze, Wolfgang; Tiras, Samuel L.; Kelley School of Business - IndianapolisIf target prices reflect the true values of stocks, they should direct prices towards intrinsic values. But analysts’ optimism and use of less sophisticated valuation methods have been found to impede target price informativeness. Contrary to conventional belief, we propose that, due to analysts’ optimism, target prices are closer to intrinsic values, and hence more informative, when investor sentiment is low. Accordingly, we find that the association of target prices with future returns is highest when investor sentiment is low and target prices are inferred to be based on sophisticated valuation methods. When investor sentiment is high, however, we find that the association of target prices with future returns approaches zero, suggesting that analyst optimism drives target prices away from intrinsic values, irrespective of the implied valuation method. Further, investors’ reactions to target price revisions are strongly positive and seemingly irrational with high investor sentiment—which potentially destabilizes markets.Item Why or How? the impact of Construal-Level Theory on vaccine message receptivity(Elsevier, 2024-02) Saxton, M. Kim; Colby, Helen; Saxton, Todd; Pasumarti, Vikram; Kelley School of Business - IndianapolisWe propose that Construal Level Theory (CLT) can be applied to incrementally improve vaccine message receptivity because it impacts a variety of health decisions and complements the constructs of the Health Belief Model. Across three studies, we explore CLT related specifically to the COVID-19 vaccine. First, we analyze Twitter sentiment and find evidence that the vaccine was a high-level construal. Then, we use prospective hindsight to show that higher-level construal dominates the explanations people provide for if they were to get vaccinated in the future. Finally leveraging construal level message congruence, we find a higher-level message is more effective than a lower-level one in increasing willingness to get vaccinated. Taken together, these studies show that a virus vaccine was perceived as a higher-level construal and suggests that future messaging should include both the higher-level ‘Why’ as well as the lower-level ‘How’ to get vaccinated.Item The impact of power and relationship commitment on customer integration: A replication and extension(Emerald Insight, 2022) Zhang, Min; Zhao, Xiande; Huo, Baofeng; Flynn, Barbara; Kelley School of Business - IndianapolisPurpose: This study aims to examine the relationships between power, relationship commitment and customer integration by replicating and extending Zhao et al. (2008) in China and the United States. Design/methodology/approach: This study collects data from 210 manufacturers in China and 202 manufacturers in the United States. Structural equation modelling is used to analyze the data. Findings: This study finds that normative relationship commitment is positively associated with customer integration and expert and referent power are positively associated with normative relationship commitment in China and the United States. Reward and coercive power are positively associated with, whereas referent power is negatively associated with instrumental relationship commitment in China. Referent, legal legitimate and reward power are positively associated with, whereas expert and legitimate power are negatively associated with instrumental relationship commitment in the United States. Originality: This study provides empirical evidence on the distinct impacts of different bases of mediated and non-mediated power in China and the United States, contributing to the development of the power-relationship commitment theory. The findings also provide insights into where and when the theory applies. The results can provide guidelines for managers to adjust the use of power to improve relationship commitment and customer integration in China and the United States.Item Unblocking the Blockchain - A Friendly Guide to the Ethereum Platform(São Paulo School of Business Administration, 2021) de Freitas, Kenyth Alves; di Serio, Luiz Carlos; Kelley School of Business - IndianapolisItem To be a great innovator, learn to embrace and thrive in uncertainty(The Conversation US, Inc., 2020-09-15) Saxton, Todd; Kelley School of Business - IndianapolisItem As professional sports come back, members of the US women’s soccer team are still paid less than the men’s(The Conversation US, Inc., 2020-06-29) Magid, Julie Manning; Kelley School of Business - IndianapolisItem The Supreme Court decision to grant protections to LGBT workers is an important expansion of the Civil Rights Act(The Conversation US, Inc., 2020-06-18) Magid, Julie Manning; Kelley School of Business - IndianapolisItem How to convince your loved ones to get the flu shot this year(The Conversation US, Inc., 2020-02-13) Colby, Helen; Meng, Li; Kelley School of Business � Indianapolis