Costello College of Business Faculty Research

Management Faculty Research

GenAI brings us closer to automating investment expertise

Jennifer Anzaldi — Thu, 22 Aug 2024 18:39:34 +0000

GenAI brings us closer to automating investment expertise Jennifer Anzaldi Thu, 08/22/2024 - 14:39

In This Story

Yi Cao

Long Chen

Large language models (LLMs) such as ChatGPT and Google Gemini excel at being trained on large data-sets to generate informative responses to prompts. Yi Cao, an assistant professor of accounting at the Donald G. Costello College of Business at ��ӽ紫ý, and Long Chen, associate professor and area chair of accounting at Costello, are actively exploring how individual investors can use LLMs to glean market insights from the dizzying array of available data about companies.

Long Chen and Yi Cao

Their new working paper, co-authored with Jennifer Wu Tucker of the University of Florida and Chi Wan of University of Massachusetts Boston, examines AI’s ability to identify “peer firms,” or product market competitors in an industry.

Cao explains the significance of selecting peers by relating this process to the real-estate market. “The capital market is similar to the real-estate market in that a firm’s value is partially determined by the value of its peers. In the real-estate market, we price a home based on the value of comparable properties in the neighborhood, or the so-called 'comps.' In our paper, we aim to leverage the power of LLMs to identify comps for evaluating firm value.”

This task is at least as difficult as it is essential. It takes much time, skill and effort to gather, aggregate and manage data to select peers. However, the researchers reasoned that LLMs could do a lot of the heavy lifting of data aggregation and analysis for the individual investors, and produce a list of peers comparable in validity to that identified by human experts.

“The advantage is in the capability to utilize all the information potentially out there so that it is at least performing as well as other traditional methods that can help us investors and researchers,” says Cao.

For the study, Chen and Cao employed Bard from Google, now known as “Gemini,” as their LLM of choice because “Bard has a greater ability to utilize its pre-training data, which is arguably larger than ChatGPT’s and with more parameters,” says Cao.

After defining “product market competition” and forming a prompt for Bard, the researchers instructed Bard to limit its knowledge pool to a specific year within the period 1981-2023, in order to avoid “look-ahead bias,” i.e., future information scrambling the results.

“We need to understand that LLMs are actually a very powerful, new tool, unmatched in their efficiency, ability to process vast amounts of information at a low cost, and accessibility to the general public.”

They limited focal firms to large, publicly listed companies as there is less data out there for smaller or private firms. In all, the data-set comprised over 300,000 focal firm-years.

On average, the LLM could generate about seven peer firms for a focal firm, a number that is similar to the SEC recommendations on how firms should disclose their segments.

The researchers then compared the LLM’s performance to the lists generated by three human experts for a set of 40 leading computer software companies. The average overlap was a little over 40 percent, greater than expected.

They also compared the AI-identified peer lists to two alternative systems for identifying peers: the federal government’s Standard Industrial Classification (SIC) codes and Text-based Network Industry Classification (TNIC), which compares firms based on linguistic similarities in their 10-K filings. The LLM’s output overlapped significantly with TNIC’s. Plus, the peers identified by the LLM were generally a better fit than those from SIC and TNIC, as their monthly stock returns hewed closer to the focal firm.

But TNIC outperformed the LLM in identifying peers for mid-sized firms within the sample, indicating that it is not a clear-cut case of universal LLM superiority.

“It’s especially beneficial for individual investors—as all the cost concerns that we’re talking about are especially relevant for them,” Chen adds.

Regarding the future of LLM, Chen states, “There are always costs and benefits associated with using generative AI. It is uncertain whether current systems will soon be obsolete.” When asked about the SEC adopting an AI tool for investors, Chen emphasizes that users need to understand the pros and cons of using AI to make their informed judgments “because AI cannot be held responsible for the information it provides or for how it is utilized.”

Chen concludes, “We need to embrace this new technology, but we must recognize that it is not yet in a perfect state. Competition to improve the technology is fierce. Our findings might just represent the lower bound of the effectiveness of the technology.”

Topics

Accounting Faculty Research

Artificial Intelligence

How this summer’s heat waves may impact the economy

Greg Johnson — Tue, 06 Aug 2024 13:39:44 +0000

How this summer’s heat waves may impact the economy Greg Johnson Tue, 08/06/2024 - 09:39

This sweltering summer has brought record-breaking high temperatures to 63 countries, all but cementing 2024’s status as the world’s hottest year on record (even though we’re barely past the halfway point). Such extreme weather trends are bound to have serious implications for the environment, public health, and the economy.

Joseph (Han) Stice

Why, then, aren’t economic indicators flashing bright red? Joseph (Han) Stice, assistant professor of accounting at the Donald G. Costello College of Business at ��ӽ紫ý, has run the numbers on business and climate change. His recent working paper, co-authored by Marcus Kirk of University of Florida and Derrald Stice of University of Hong Kong, paints a picture of profound climate-related disruption underneath the placid-seeming surface of the economy.

For the years 1990 to 2020, the researchers compared quarterly sales performance from a large sample of U.S. firms to the temperature data at their base of operations. In this way, they constructed a measure of weather sensitivity, which they termed “weather beta,” for each company in the initial sample. Specifically, they were looking at whether sales either benefited or suffered when local temperatures were higher or lower than the “ideal” of 65 degrees Fahrenheit.

“What they—they being the people who examine temperature—say is that if it’s above 65, you turn on your air conditioning. If it’s below 65, you turn on your heater,” says Stice.

After restricting the sample to only those firms with discernible weather beta, they ended up with a data-set comprising 66,795 firm-quarters.

Across the sample as a whole, the results were a misleading nonstarter. Weather fluctuations did not seem to have an impact on economy-wide sales, one way or the other.

This was no surprise to Stice. Citing past research, he points out that “the overall economic effect is that colder weather is, on average, better. But that’s not true in every single instance. Some industries (i.e., agriculture) benefit from hot weather. And it also depends on what region you’re in, what time of year it is, etc.”

“We need to have a national discussion and a global discussion,” Stice says. “But the people who really matter are the local leaders, as far as climate is concerned. The people you elect on the local level are going to have a much greater impact on how you respond and how your companies can adjust, than whether or not your candidate is in the White House.”

To gauge actual impact, the researchers split the sample by size and geographic concentration, presuming that larger firms with a wider geographic footprint would be less affected by temperature changes at home base. These differences between firms proved to be critical. For the smallest, most localized firms, a swing from the 75th to the 25th percentile in terms of nonideal temperature meant 8.8-15.9% lower sales. The biggest and most sprawling firms saw sales declines of just 4.3-5.6% from an equivalent shift.

Stice clarifies that “we are talking about very small deviations, like percentages of degrees on average per day over an entire quarter. If it were one degree hotter than 65 degrees every day, that would come up in our measure as a 90. The biggest number we have is like a 25 or a 30.”

Also, sales impact tells only part of the story. The sheer size of the data-set allowed Stice and his co-authors to predict quarterly sales performance for individual firms, based on the weather and firm characteristics. On average, actual sales declines were about half as severe as predicted. The researchers speculate that firms were able to soften the blow of immoderate temperatures by adjusting their business practices. The time and resources spent on these adaptations are part of the hidden economic costs of climate volatility.

If firm managers can anticipate how the weather can impact business outcomes, you would expect financial analysts to be at least as attentive to climate effects. However, the researchers found that sales forecasts made shortly before earnings announcements were thrown off by abnormal temperatures in the previous quarter, with 7.4% inaccuracy in the mean. Similarly, the researchers found that weather impact was positively correlated with announcement-period stock market returns. Apparently, even professional investors are being caught off guard by the subtle but costly interactions between climate and economic activity.

For more accurate appraisals, Stice suggests we should turn to the local level. He notes that his measures of firm-specific weather sensitivity happen to line up fairly neatly with municipal self-assessments made by local governments as part of the Carbon Disclosure Project.

Empower your future with Costello College of Business

In This Story

Han Stice

Topics

Accounting Faculty Research

Scared to negotiate job offers? Do it anyway. Here’s why.

Jennifer Anzaldi — Tue, 16 Jul 2024 14:17:48 +0000

Scared to negotiate job offers? Do it anyway. Here’s why. Jennifer Anzaldi Tue, 07/16/2024 - 10:17

Getting a job offer can be a joyful experience. Often, however, the elation quickly gives way to a state of anxiety, as candidates agonize over whether to accept the terms on the table, or negotiate for better ones. After all, it’s commonly believed that job candidates who negotiate, risk losing the opportunity.

Einav Hart

Einav Hart, assistant professor of management at the Donald G. Costello College of Business at ��ӽ紫ý, challenges that assumption in a recent research paper for Organizational Behavior and Human Decision Processes. Her findings suggest that the expected worst-case scenario—having a job offer rescinded—may be a much more remote possibility than most job candidates believe.

The paper was co-authored by Julia Bear of Stony Brook University and Zhiying (Bella) Ren of University of Pennsylvania.

The researchers conducted seven studies involving more than 3,000 participants. To start with, they surveyed job candidates, hiring managers, and experienced professionals. These surveys showed that job candidates thought it highly likely that negotiating would lose them the job offer, while managers took a more flexible view. The hiring managers reported extending an average of 26.9 job offers during their careers, only 1.73 of which were withdrawn after a candidate negotiated.

In subsequent studies using in-person and online negotiations, Hart and her co-authors found that even taking on an imaginary role changes how one views the negotiation and its risks. They randomly assigned participants to play either a “job candidate” or a “hiring manager,” with real money at stake based on any agreed-upon job offer.

The researchers found that two psychological mechanisms were particularly relevant to explain job candidates’ exaggerated risk estimation: zero-sum perceptions, or the idea that parties in a negotiation are fighting over a fixed and finite resource, and power perceptions, i.e., how much candidates felt they had the ability to influence the hiring manager. Moreover, because of their concern about losing the deal, nearly half the candidates chose to accept the offer as is and not to negotiate.

All else being equal, candidates tended to take a much more competitive (i.e., zero-sum) view of negotiations and a less optimistic view of their power than did the “managers.” This may help explain why so many of us shy away from bargaining for better job offers, to our own detriment.

Hart says that “negotiating is not just zero-sum. Besides negotiating salary, maybe you care more about teleworking than a small signing bonus. The hiring manager might really appreciate the savings and be flexible about how often you come into the office. Thus, this negotiation (and many others) can have a win-win, mutually beneficial solution.”

Indeed, candidates primed to consider negotiation as a potential win-win interaction (as opposed to zero-sum) were less likely to fear losing the deal entirely, and by extension to forgo negotiations. Likewise, candidates primed to have higher power perception were less concerned about jeopardizing a deal and less likely to forgo negotiation. However, even with low zero-sum or power perceptions, candidates still overestimated their risk of losing the deal.

“Besides negotiating salary, maybe you care more about teleworking than a small signing bonus. The hiring manager might really appreciate the savings and be flexible about how often you come into the office. Thus, this negotiation (and many others) can have a win-win, mutually beneficial solution.” —Einav Hart

At the same time, Hart’s prior work suggests that negotiation is a decision that should be made carefully by each party. A previous paper introduced the concept of “Economic Relevance of Relational Outcomes” (ERRO), which points to the fact that there is often a long-term financial advantage in preserving strong relationships, over and above incremental gains to be won in any one negotiation.

Hart says, “Consider negotiating for a babysitter’s rate. What use is negotiating for a great deal on the rate if the babysitter feels bullied in the negotiation and is not excited to take care of your kids?”

Negotiating a job offer is tough and there is a legitimate risk that negotiating can jeopardize the deal. However, Hart’s research suggests that job candidates overestimate this risk and can often obtain better outcomes through negotiating a job offer—at least if they preserve a good relationship.

Looking for more advice? Check out Career Services!

In This Story

Einav Hart

Topics

Management Faculty Research

The NYPD gave officers iPhones. Here’s what we learned about race and policing

Jennifer Anzaldi — Tue, 04 Jun 2024 16:50:43 +0000

The NYPD gave officers iPhones. Here’s what we learned about race and policing Jennifer Anzaldi Tue, 06/04/2024 - 12:50

In This Story

Brad Greenwood

The controversy about biased policing seems to draw endless fuel from race-based differences in public perception. Simply put, the vast majority of White citizens in the United States believe the police are doing a good job, including on issues of racial equality, while a similar percentage of Black citizens hold the opposite opinion. And while a growing number of studies have indicated persistent patterns of racial discrimination in policing, an emergent concern among scholars is that the data these papers rely on are also subject to baked-in biases, since they often derive from officers’ self-reports of their own behavior.

Brad Greenwood

Enter Brad Greenwood, professor of information systems and operations management at the Donald G. Costello College of Business at ��ӽ紫ý. One of his research interests lies in how digital technologies are bringing unprecedented transparency to police practices. For example, Greenwood’s 2022 paper documented how the introduction of body-worn cameras for the New York Police Department (NYPD) resulted in a significant reduction in abuse-of-authority complaints.

His latest work on policing is forthcoming in Proceedings of the National Academy of Sciences. Along with Gordon Burtch from Boston University and Jeremy Watson from the University of Minnesota, Greenwood examined the recent rollout of iPhones across the NYPD, which included a series of digital tools designed to replace the handwritten memo books officers previously relied on. Instead of scribbling in the physical books, which NYPD officers were required to hang onto even into retirement, officers could log their activities directly into a centralized database maintained by the NYPD. These detailed digital records shed fresh light on how cops spend their time—and attention—on the beat.

The researchers tracked data on NYPD stops and complaints in 2017 and 2018, the period when iPhones were being rolled out across precincts in New York City. A curious pattern emerged. There was an 18% increase in reported stops after a precinct received iPhones, which would be consistent with the digital tools making it easier for officers to report a citizen interaction. Further, the researchers discovered that this increase resulted in neither more arrests nor more complaints from the public. It wasn’t, therefore, that the phones were somehow causing the police to stop people more often, but rather that so-called “unproductive stops”—those leading to no further action—were being reported more often.

However, when breaking the results down across White and non-White citizens, the researchers found that unproductive stops involving non-White citizens were entirely responsible for the increase. In other words, the observed changes were based on police encounters with non-White members of the public, that would likely have gone unreported in the days of pen and paper. More specifically, after switching to the smartphone system, officers logged 22% more stops involving non-White citizens, while the number of reported stops of White citizens remained unchanged. These are statistical averages—the pattern was more marked in high-crime neighborhoods and those with a greater proportion of non-White residents.

Greenwood offered an interpretation of the finding: “The concern here is that we have an underreporting, which is concentrated in certain groups and means that we need to be cautious when interpreting prior work. On the one hand, it opens the door to bias in police interactions with civilians being worse than initially anticipated, at least based on the frequency of stops. On the other hand, it could mean that older data doesn’t accurately reflect the likelihood of an arrest once a stop occurs. And we need to be doubly cautious, because we don’t know if officers are reporting stops more frequently just because it is easier, or for some other reason.”

Greenwood cautions against making sweeping conclusions based on the study. “The only thing we know for sure is that more and deeper work is needed by scholars and policy makers to ensure transparency between law enforcement and the people they are charged to protect,” he said.

On the whole, however, the study raises the possibility that race-based disparities in policing are not only very real, but may have been underestimated thus far because of reporting gaps.

As police officers are not obligated to document all civilian interactions, their decisions regarding what—and what not—to report can be biased. The introduction of new technology, as in the case of the NYPD, can help counter such biases, but is not the only avenue worth pursuing. The researchers recommend that police departments “investigate the appropriate organizational complements (i.e., policies and procedures) necessary to uncover and eliminate such biases.”

Topics

ISOM Faculty Research

��ӽ紫ý’s government contracting center is helping the Pentagon enter the 21st century

Jennifer Anzaldi — Thu, 30 May 2024 16:17:30 +0000

��ӽ紫ý’s government contracting center is helping the Pentagon enter the 21st century Jennifer Anzaldi Thu, 05/30/2024 - 12:17

When the Pentagon attempts to field innovative technology, its contracting decisions are largely dictated by a process that predates personal computing. Known as the Planning, Programming, Budgeting and Execution (PPBE) resourcing system, it betrays its mid-20th-century origins in its extreme emphasis on long-range management and sequential planning over more agile and rapid program execution.

Jerry McGinn

Calls for PPBE reform are nothing new in the halls of the Pentagon, but recent geopolitical threats have contributed to a general recognition within the federal government that change is badly needed to speed the development and acquisition of new military capabilities.

Hence Congress’s formation in 2022 of an independent commission tasked with closely assessing the current process and making specific recommendations for reform.

The Commission on PPBE Reform promptly engaged the Greg and Camille Baroni Center for Government Contracting at the Donald G. Costello College of Business at ��ӽ紫ý as a key research partner. The center was awarded a $645,000 Department of Defense (DoD) research contract consisting of two projects.

First, the research team, headed by the center’s executive director Jerry McGinn, prepared six case studies documenting PPBE’s effect on DoD’s work with both research and development centers and industry to develop and adopt new technologies.

“We set up hypotheses and did background research on the programs,” McGinn says. “Our conclusions were based on a number of interviews with government and industry officials.”

For example, one of the case studies dealt with the Air Force’s Collaborative Combat Aircraft (CCA) program, for the development of AI-piloted combat drones. Five Air Force officials involved in CCA told the Baroni research team that PPBE complicated necessary collaborations with the Navy and other agencies, due to siloed budgeting protocols making it difficult to align priorities and make resource decisions in a timely manner.

Next, the Baroni research team turned their attention to three inter-related subtasks delving into specific rules governing PPBE’s application.

“For this project, we used a mixture of non-public DoD unclassified databases as well as information available to the general public,” says McGinn.

The researchers investigated whether PPBE should vary based on DoD’s acquisition categories or remain the same for all categories, concluding that the categories were similar enough to warrant a unified process. They were also asked to evaluate how military departments and agencies use PPBE’s various acquisition pathways, resulting in a determination that “budget justification documents, particularly for RDT&E (research, development, testing and evaluation), are overly complex, unnecessarily intricate, and lack standardization”. Finally, the researchers performed an extensive analysis of PPBE’s legal underpinnings and the wider governmental implications of reforming the process.

The team’s final report, submitted to the commission early in 2024, contained a consolidated list of dozens of findings and recommendations. In its own report issued in March 2024, the PPBE Reform Commission cited the Baroni team’s research numerous times.

“Our work played a large role in informing the Commission’s findings and reinforcing their policy recommendations,” McGinn noted. “These inputs are today being considered as Congress debates 2025 appropriations and DoD concurrently develops and vets the budget for 2026 and 2027.

Shortly after the release of the Commission’s report, the Greg and Camille Baroni Center for Government Contracting hosted a rollout event at Mason Square featuring the Commission’s chair, vice-chair and executive director. A series of additional events around PPBE reform are being planned for the summer.

“Our report reflects the strategic vision with which ��ӽ紫ý established this research center. Our research and analysis inform the federal government as well as the large government contracting industry here in the national capital region. Our relationships and location make the center uniquely situated to benefit policy-makers and entrepreneurs, alike,” McGinn says.

In This Story

John G. (Jerry) McGinn

Learn more about the Costello College of Business

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Center for Government Contracting

Center for Government Contracting News

Mason Momentum

��ӽ紫ý faculty are tackling cybersecurity’s talent pipeline problem

Jennifer Anzaldi — Fri, 10 May 2024 17:01:06 +0000

��ӽ紫ý faculty are tackling cybersecurity’s talent pipeline problem Jennifer Anzaldi Fri, 05/10/2024 - 13:01

If you’re a cybercriminal, the latest news on cybersecurity talent shortfalls should put a smile on your face. For example, the majority of cybersecurity leaders report that their teams are understaffed, and they have problems retaining qualified professionals.

But for Nirup Menon, a ��ӽ紫ý professor of information systems and operations management (ISOM), and Brian Ngac, an instructor in the ISOM area, this workforce challenge is a golden career opportunity for the young people of Northern Virginia and the Washington, D.C., area.

Nirup Menon and Brian Ngac

The pair recently won a two-year award from the National Institute of Standards and Technology (NIST), an agency within the U.S. Department of Commerce, to create unique experiential learning opportunities and workshops designed to enhance cybersecurity education and workforce development.

Working closely with industry partners Mobius Consulting and Institute for Defense Analyses (IDA), Menon and Ngac will recruit and help select students to work on actual cybersecurity projects. “They need to have taken some fundamental cyber class ahead of time,” Menon clarifies. “We want students with a commitment to the field. It allows you to get experience but it’s also competitive.”

Throughout the 12-week projects, students will receive mentoring both from the industry participant and from business faculty. “We run it in an agile scrum-like manner,” Ngac says. “Every week, we ask ‘What did you do?’ ‘What are you going to do?’ ‘What are the challenges that are impacting your work?’” If students run into trouble, faculty mentors can work with industry managers to help them get back on track.

“We’re trying to build not just the cyber workforce but the skills as well,” Ngac says.

Menon and Ngac have developed a specialty in this type of hands-on learning, which they have dubbed the Professional Readiness Experiential Program (PREP). More than 100 Virginia-based undergraduates and 20 industry participants have participated in PREP, which includes projects funded by two Commonwealth Cybersecurity Initiative Experiential Learning grants in collaboration with Mobius and IDA.

“PREP not only focuses on cybersecurity projects, but also works on many business process improvement projects,” says Ngac. "Honors and high-performing ISOM students work on real-world projects with industry participants on identifying technical solutions to business challenges through rigorous research, modelling, analysis, quantification, risk management, implementation planning, and, at times, execution.”

The NIST award also incorporates workshops for students who are new to cybersecurity but interested in exploring it as a career option. Workshops will be launched in collaboration with Trinity Washington University (TWU), an HBCU whose College of Arts and Sciences is women-only. For a field such as cybersecurity, which continues to face diversity challenges, the participation of organizations such as TWU is essential.

“We want to bring in students who have not thought of cybersecurity as a field, because they think it’s all engineering, hacking and coding,” Menon says. The workshops will emphasize the variety of functions that are integral to the space, such as management and auditing, in addition to engineering.

Students and industry participants in the current CCI Experiential Learning Projects

“It’s not just tech, there may be creativity involved in anticipating scams and threats,” Ngac explains. “These are different things we’ll be bringing up in the workshop in terms of roleplaying what cybercriminals might do, or how someone might try to socially engineer an attack.”

Unlike a standard grant, the NIST award is structured as a cooperative agreement in which the funding agency will collaborate in shaping and delivering programs as they evolve.

“The advantage of working with NIST is that top people work there. They are the standards body, so they have seen and surveyed a lot of industry,” Menon says. He also lauds NIST’s high-level view of cybersecurity and its implications. “They’re not just looking at technology but also public policy, human factors, etc. It’s a holistic approach.”

Organizations interested in being an industry participant (whether they have cybersecurity-focused or business process improvement-focused projects) with PREP are encouraged to contact Brian Ngac.

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Topics

Commonwealth Cyber Initiative (CCI)

ISOM Faculty Research

workforce

Students

National Institute of Standards and Technology NIST

Tech Talent Investment Program (TTIP)

Strategic Direction

Costello College of Business leads the way in entrepreneurship research

Jennifer Anzaldi — Thu, 21 Mar 2024 15:37:47 +0000

Costello College of Business leads the way in entrepreneurship research Jennifer Anzaldi Thu, 03/21/2024 - 11:37

In This Story

Toyah Miller

Heather Vough

*This article was originally published in the January 2024 edition of Impact magazine.

The college that now bears Donald G. Costello’s name is a fitting testament to his entrepreneurial legacy. This extends not only to coursework and outreach programs, which have long stressed entrepreneurship, but also to the faculty’s research expertise. Indeed, a number of Costello College of Business professors were key contributors to ��ӽ紫ý's being named the #2 university for entrepreneurship research in North America by independent ratings agency EduRank.

Here are just a few examples of researchers who have made meaningful contributions to the field in recent years:

Mahesh Joshi

MAHESH JOSHI
Associate Professor, Management

Mahesh Joshi’s more than 30 peer-reviewed publications mostly focus on fostering qualities and skills essential to entrepreneurial success, both within and outside large organizations.
For Joshi, good entrepreneurs are primarily defined by how they think and what they do. Start-up founders and small business owners share a problem-solving skill set with change agents working in big corporations.

“For long-term success of corporations or start-ups, every person has to think like a change agent,” Joshi says. “And that change agent’s approach comes through understanding certain variables like risk-taking, innovativeness, and how to handle the political situation whether you have autonomy or not. And if we do that, we are building the whole toolkit of corporate entrepreneurship or regular entrepreneurship.”

For example, Joshi’s co-authored 2015 paper in Decision Sciences elaborates on the delicate balance between proactiveness and innovativeness within technology-based services firms. With too much proactive change agency, strategy execution (which contributes to innovativeness) suffers. Joshi found that a formalized organizational structure can moderate the tensions between these two factors, while helping firms reap more innovative benefits from risk-taking.

Most recently, Joshi has been looking at how entrepreneurship education can be most effective in driving students’ behavior once they graduate, especially for groups that have been historically excluded from entrepreneurship. His co-authored 2022 paper in Journal of Enterprising Communities suggested a new potential method to narrow the well-established gap in “entrepreneurial intention” between male and female students. He found that for entrepreneurship students from four universities in India, entrepreneurial intention was linked to a sense of career-readiness. Where that sense was present, the gender gap in intention disappeared.

Career readiness (“a proxy for confidence,” as Joshi terms it) is emotional and subjective, and is not something that can be learned from a book. Therefore, Joshi advises policymakers and pedagogues, “Just classroom education is not enough…If educators want to create an entrepreneurial mindset free of gender bias, they have to create an environment where there are co-curricular activities like pitch competitions and site visits.”

Toyah Miller

TOYAH MILLER
Professor, Management
Serving as research director for the Center for Innovation and Entrepreneurship, Toyah Miller is a leading thinker in the burgeoning field of social entrepreneurship research. Where the standard entrepreneur strives simply to maximize profit, social entrepreneurs attempt to solve a difficult social problem while keeping their business viable. Miller’s published research delves into the unique motivations and challenges involved in social entrepreneurship.

In a 2013 paper for Academy of Management Review, Miller theorized that compassion and caring served as a joint catalyst for social entrepreneurship activity, and thus not all entrepreneurs fit the mold of rationally self-interested businesspeople. Although her view validates entrepreneurs seeking to make the world a better place, it also suggests that the primacy of “heart over head” could lead social entrepreneurs to take on undue business risks.

In an ongoing research study, Miller looks at how the idealism of entrepreneurs affects their crowdfunding pitches to potential investors. Surveying more than 200 Kickstarter creators, she finds that idealistic creators posted fewer informative updates on their campaign pages, and as a result were less likely to get funded. In Miller’s view, this provides yet more evidence of heart-based entrepreneurs making sub-optimal choices, in this case by overestimating potential backers’ willingness to help and underestimating their need to be convinced.

Cognitive biases such as idealism are not limited to entrepreneurs. Another one of Miller’s in-progress studies examines the types of feedback given to start-up founders within accelerators and incubators. Generally, entrepreneurs were more likely to take negative feedback on board when it came with concrete recommendations. When feedback was more abstract, urging change with no specific alternative mentioned, it was less influential on decision-making. Therefore, the framing of feedback could, in some cases, make the difference between success and failure for entrepreneurs whose venture is in need of a pivot.

Heather Vough

HEATHER VOUGH
Associate Professor, Management
One of Heather Vough’s chief research specialties is professional identity. Her 2023 paper for Academy of Management Discoveries considers the effects of entrepreneurship’s cultural centrality—as reflected in hit shows such as Shark Tank and movies like Wolf of Wall Street—upon actual practitioners’ sense of themselves.

Through multiple rounds of exhaustive interviews with 29 entrepreneurs from North America and Australia, the authors discovered that while founders readily self-identify as entrepreneurs, they are reluctant to present themselves as such in social situations. Instead, they will use substitute self-descriptors such as job titles or company names—basically, anything except “entrepreneur.”

Analyzing interview responses alongside existing research on professional identity, the authors posit that founders decline to call themselves “entrepreneurs” because: a) they fear they would be misunderstood; and/or b) they believe the label would make them seem unrelatable to nonentrepreneurs. In other words, the cultural and economic emphasis on entrepreneurship has backfired to an extent. By flooding the zone with misleading or ambiguous impressions (e.g., entrepreneurs are all rich Silicon Valley “bros”), entrepreneurship’s exponents have inadvertently turned the term into a social liability.

Topics

Center for Innovation and Entrepreneurship

entrepreneurship

Women’s empowerment in the workplace starts with smarter networking

Colleen Rich — Mon, 11 Mar 2024 17:13:51 +0000

Women’s empowerment in the workplace starts with smarter networking Colleen Rich Mon, 03/11/2024 - 13:13

Women’s History Month offers a chance to examine the gender leadership gap. According to a 2022 World Economic Forum report, just 31% of global leadership roles are held by women.

Sarah Wittman. Photo provided

Networking is one effective way to bridge the gap, but research shows that women are at an unfair disadvantage in this area. Sarah Wittman, an assistant professor of management at Costello College of Business at ��ӽ紫ý, unpacks this complex problem and proposes some potential research-based solutions.

Why is it important for women to network as much—and as strategically—as men?

To rise to the top, you have to be known and known of. You have to have social capital—and a social network that makes a difference. Of course, nobody likes to be thought of as “that person”: the person who uses other people for their own advancement. Yet research suggests that in professional networks women are less likely than men to network instrumentally, accumulate instrumental ties and, thus, less likely to have within their networks the powerful people who can help them advance and get things done. Over time, women’s network deficits accumulate: especially in an age of online social media including LinkedIn, if you didn’t connect with colleagues in your last job, you likely aren’t connecting this job. And those people are the ones who know you and could help you land your next job.

What, then, can women do to build useful career networks?

One piece of advice is, of course, to change your mentality—so that networking becomes relationship-building not just contact-accumulation. That fits better with what is expected of women and is less likely to receive backlash. Where networking is “just” relationship-building, it becomes less intimidating and, quite frankly, less grossly utilitarian. Especially when you’re not needing anything now, you can creatively focus on what you might give. Rather than thinking about the resources you might need, think about what resources you might represent for others. The universe repays, and having established contacts when you do need to leverage them is invaluable.

Second, make network-building easy on yourself. Just do it. LinkedIn particularly and other similar online social media are amazing tools because they are both personal and surprisingly impersonal. These days, people link with people they don’t even actually know—but perceive as working in the same industry, or in a relevant function. Linking with those possibly relevant others will not only be low risk (the “no,” if there is one, doesn’t come face-to-face), but where you engage with the platform, the professional content that you produce will allow you and your resources to become known, and known of, across your contacts’ feeds.

It’s easier to start with networks that you legitimately belong to alumni of – your high school, university, or sorority, and people who share some element of your professional past or present (ex- or present colleagues). You never know who is doing what, and how that might be related to your own career.

Unbeknownst to you, you may already have valuable social capital at your fingertips, in so-called “multiplex” ties—ones that can serve multiple ends. Do you know what your neighbors do for work? What about your children’s friends’ parents? Or your spouse’s co-workers’ spouses (or children)? But, again, the more of a decent human being you are in these relationships, the more likely they might be willing to provide professional value as well.

So the networking gap boils down to women being “too nice,” not aggressive enough to put themselves out there?

No! Scholars have written extensively on the so-called “double-bind” for women, especially those in leadership positions. Research shows that—regardless of what they do—they will be judged negatively based on warmth versus competence. Too nice? Not smart, and disrespected. Too strategic? Cold and conniving, and disliked. This goes for networking, too. Women who “reach for the top” in their networking are not seen as team players (violating feminine norms of communalism) and may suffer a status penalty versus women who have less instrumental networks. But women who don’t have those instrumental ties aren’t able to advance.

“Fixing women” is not the answer. In the C-suite, empowering words for women must be matched by action. Senior leaders must be ready to appoint capable and deserving women to positions of organizational relevance.

Closer to home, men who love women and have seen women’s challenges firsthand tend to be some of our biggest allies. CEOs with daughters, for example, are more likely to have women join their boards. Men: Understand that the women whose advancement you empower today will—en masse—be the role models that pave the way for the advancement of your own daughters, nieces, and granddaughters.

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Management Faculty Research

Costello College of Business finance professor receives coveted NSF early-career award

Greg Johnson — Thu, 22 Feb 2024 15:43:13 +0000

Costello College of Business finance professor receives coveted NSF early-career award Greg Johnson Thu, 02/22/2024 - 10:43

Jiasun Li, a recently promoted associate professor of finance at the Costello College of Business at ��ӽ紫ý, has received a prestigious CAREER award from the National Science Foundation (NSF).

Jiasun Li

According to the NSF website, the CAREER award is given to “early-career faculty who have the potential to serve as academic role models in research and education and to lead advances in the mission of their department or organization.”

The award totals $711,679 over five years. It will support Li’s ongoing research into the organization of digital services with the rise of emerging technologies.

This project jumps off from recent developments in cloud and decentralized computing. Both technologies present radical new possibilities for off-premise digital services, as evidenced by the rise of numerous cloud service providers as well as blockchain platforms.

However, the presence of strategic incentives may undermine the smooth and reliable functioning of such systems. For example, cloud providers may opt to short-charge clients when it comes to the provision of services, if it is in their best interests to do so. Alternatively, strategic actors may also disrupt the consensus protocols governing decentralized systems.

Li proposes to tackle these problems in an interdisciplinary manner, blending tools from computer science (as the topic is inherently about digital services) and economics (since incentive analysis traditionally falls in the domain of economics). He has finely honed this approach in a series of papers applying analytical models based on economic principles to decentralized systems such as blockchain proof-of-work technologies.

The ultimate goal of Li’s project, as stated in his NSF proposal, is to “guide the efficient organization of digital services for productivity gains, and thus enhance the economic competitiveness of the United States.”

Previously, Li received individual and collaborative grants from Mason’s Multidisciplinary Research Initiative, the U.S. Department of Homeland Security, and the Ethereum Foundation, among others. He was recently named an inaugural Faculty Fellow of Mason’s Institute for Digital Innovation (IDIA).

“I am extremely honored to receive an NSF CAREER Award because such grants are traditionally rare in business schools," said Li. "I really appreciate the trust NSF bestowed on me. This recognition is only possible thanks to the tremendous support and many forward-looking initiatives from Mason and the Costello College of Business, as well as many colleagues across different disciplines who have inspired, guided, and elevated me over the years. I look forward to carrying out the interdisciplinary research projects under the continued support from NSF and the University/Costello College of Business.”

Ajay Vinzé, dean of the Costello College of Business, said, “This prestigious award from NSF is a fitting recognition of Jiasun’s superb/impactful research record and a proud moment for Costello College of Business--Congratulations Jiasun! As the evolution of the digital economy plays out, research like Jiasun’s project is going to provide relevant and actionable insights. I look forward with great excitement to contributions that are forthcoming.”

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