This is a picture of ESMT books and working papers

Publications

ESMT Berlin publishes in international academic journals, which are first-class in their respective fields. Research also provides cutting-edge and profound insights for the business community as well as the classroom through managerial publications and case studies. This rare integration of research and practice makes ESMT Berlin an outstanding location for generating relevant and ground-breaking knowledge.

Journal Article

Impact assessment: Corporate sustainability 2.0

Stanford Social Innovation Review
Joanna Radeke (2016)
Abstract:
Subject(s): Ethics and social responsibility
Keyword(s): Corporate social responsibility, corporations, environmental sustainability, human resources, organizational learning, performance metrics, socially responsible business, transparency
JEL Code(s): M000

Also available in Portuguese: Mensurando impacto: Sustentabilidade empresarial 2.0.


Journal Article

Team diversity and categorization salience: Capturing diversity-blind, intergroup biased, and multicultural perceptions

Organizational Research Methods 19 (3): 433–474
Margarita Mayo, Daan van Knippenberg, Laura Guillén, Shainaz Firfiray (2016)
Abstract:
Subject(s): Human resources management/organizational behavior
Keyword(s): Multivariate analysis, computational modeling, team diversity, categorization salience, leadership

It is increasingly recognized that team diversity with respect to various social categories (e.g., gender, race) does not automatically result in the cognitive activation of these categories (i.e., categorization salience), and that factors influencing this relationship are important for the effects of diversity. Thus, it is a methodological problem that no measurement technique is available to measure categorization salience in a way that efficiently applies to multiple dimensions of diversity in multiple combinations. Based on insights from artificial intelligence research, we propose a technique to capture the salience of different social categorizations in teams that does not prime the salience of these categories. We illustrate the importance of such measurement by showing how it may be used to distinguish among diversity-blind responses (low categorization salience), multicultural responses (positive responses to categorization salience), and intergroup biased responses (negative responses to categorization salience) in a study of gender and race diversity and the gender by race faultline in 38 manufacturing teams comprising 239 members.

With permission of SAGE Publishing

Volume 19
Issue 3
Pages 433–474

Journal Article

A tool to map your next digital initiative

Harvard Business Review
Joe Peppard (2016)
Abstract:
Subject(s): Information technology and systems, Technology, R&D management
Keyword(s): Change management, IT, benefits dependency network (BDN), digitalization
JEL Code(s): O32, O33

Given all the attention that “digital” is getting at the moment, you would be forgiven for thinking that it is somehow new. In fact, the relentless drive to embrace digital technologies has been ongoing for many decades.

What also seems to have been forgotten are the lessons from these earlier attempts to leverage IT (remember that IT is a digital technology). Unfortunately, the history of IT investments in most organizations is far from stellar: Research over the years suggests that the overall failure rate of IT projects is around 70%. We know that when IT projects fail, it is usually not because the technology didn’t work (although this can sometimes be the case), but because the changes required at an organizational and employee level weren’t managed effectively. Quite simply, adding technology does not automatically confer expected benefits; these benefits have to be unlocked and this can only happen through achieving organizational changes.

ISSN 0017-8012 (Print)

Journal Article

Managing customer satisfaction better

The European Business Review May/June: 52–54
Abstract:
Subject(s): Marketing
Keyword(s): Market research, customer satisfaction, statistics
JEL Code(s): M310
Issue May/June
Pages 52–54

Journal Article

Where do you begin with your (big) data initiative?

The European Business Review May/June: 19–25
Joe Peppard (2016)
Abstract:
Subject(s): Technology, R&D management
Keyword(s): Big data, knowledge creation, insight, information, IT, competitive advantage
Issue May/June
Pages 19–25

Journal Article

United we stand or divided we stand? Strategic supplier alliances under order default risk

Management Science 62 (5): 1297–1315
Xiao Huang, Tamer Boyaci, Mehmet Gumus, Saibal Ray, Dan Zhang (2016)
Abstract:
Subject(s): Management sciences, decision sciences and quantitative methods, Product and operations management
Keyword(s): Cooperation, competition, supply risk, coalition stability, supplier alliances

We study the alliance formation strategy among suppliers in a framework with one downstream firm and n upstream suppliers. Each supplier faces an exogenous random shock that may result in an order default. Each of them also has access to a recourse fund that can mitigate this risk. The suppliers can share the fund resources within an alliance, but they need to equitably allocate the profits of the alliance among the partners. In this context, suppliers need to decide whether to join larger alliances that have better chances of order fulfillment or smaller ones that may grant them higher profit allocations. We first analytically characterize the exact coalition-proof Nash-stable coalition structures that would arise for symmetric complementary or substitutable suppliers. Our analysis reveals that it is the appeal of default risk mitigation, rather than competition reduction, that motivates cooperation. In general, a riskier and/or less fragmented supply base favors larger alliances, whereas substitutable suppliers and customer demands with lower pass-through rates result in smaller ones. We then characterize the stable coalition structures for an asymmetric supplier base. We establish that grand coalition is more stable when the supplier base is more homogeneous in terms of their risk levels, rather than divided among a few highly risky suppliers and other low-risk ones. Going one step further, our investigation of endogenous recourse fund levels for the suppliers demonstrates how financing costs affect suppliers’ investments in risk-reducing resources and, consequently, their coalition formation strategy. Last, we discuss model generalizations and show that, in general, our insights are quite robust.

© 2016 INFORMS

Volume 62
Issue 5
Pages 1297–1315

Journal Article

CSR and the frontline context: How social programs improve customer service

GfK Marketing Intelligence Review 8 (1): 24–29
Daniel Korschun, CB Bhattacharya, Scott D. Swain (2016)
Abstract:
Subject(s): Human resources management/organizational behavior
Keyword(s): Corporate social responsibility, organizational identification, employee-customer identification, customer orientation, job performance

CSR activities such as charitable giving, environmental programs and ethical practices can motivate frontline employees. One of the key variables is organizational identification. CSR communicates values, and, if these values are consistent with a person’s own value system, it results in higher identification with the company. Employees who notice that consumers are fond of the company’s CSR activities will identify even more with the company. If CSR ranks high in their own personal value system and the value system of the consumer as well, they find common ground for conversations beyond immediate business talk. CSR can be an icebreaker in conversations with customers. Once service employees find out that customers share their passion for social or environmental causes, it creates a bond that is highly motivating. They become more confident that they know what the customers want. They are more motivated to serve those customers when they see that both of them care about the same sorts of things.

Volume 8
Issue 1
Pages 24–29

Journal Article

Status-aspirational pricing: The "Chivas Regal" strategy in US higher education, 2006–2012

Administrative Science Quarterly 61 (2): 217–253
Noah Askin, Matthew S. Bothner (2016)
Abstract:
Subject(s): Human resources management/organizational behavior, Management sciences, decision sciences and quantitative methods, Strategy and general management
Keyword(s): Status, performance feedback theory, decision making, college rankings, Chivas Regal effect, pricing, signaling

This paper examines the effect of status loss on organizations’ price-setting behavior. We predict, counter to current status theory and aligned with performance feedback theory, that a status decline prompts certain organizations to charge higher prices and that there are two kinds of organizations most prone to make such price increases: those with broad appeal across disconnected types of customers and those whose most strategically similar rivals have charged high prices previously. Using panel data from U.S. News & World Report’s annual rankings of private colleges and universities from 2005 to 2012, we model the effect of drops in rank that take a school below an aspiration level. We find that schools set tuition higher after a sharp decline in rank, particularly those that appeal widely to college applicants and whose rivals are relatively more expensive. This study presents a dynamic conception of status that differs from the prevailing view of status as a stable asset that yields concrete benefits. In contrast to past work that has assumed that organizations passively experience negative effects when their status falls, our results show that organizations actively respond to status loss. Status is a performance related goal for such producers, who may increase prices as they work to recover lost ground after a status decline.

With permission of Sage

Volume 61
Issue 2
Pages 217–253

Journal Article

Characterizations of weighted and equal division values

Theory and Decision 80 (4): 649–667
Sylvain Béal, André Casajus, Frank Huettner, Eric Rémila, Philippe Solal (2016)
Abstract:
Subject(s): Management sciences, decision sciences and quantitative methods
Keyword(s): Equal division, weighted division values, non-negative player, addition invariance on bi-partitions, nullified solidarity
Volume 80
Issue 4
Pages 649–667

Journal Article

Competition policy in modern retail markets

Journal of Antitrust Enforcement 4 (1): 42–83
Hans W. Friederiszick, Ela Głowicka (2016)
Abstract:
Subject(s): Economics, politics and business environment
Keyword(s): Retail competition, externalities, free-riding, vertical restraints, cross-channel shopping, competition law
JEL Code(s): K21, L42, L81
Volume 4
Issue 1
Pages 42–83

Journal Article

Inducing environmental disclosures: A dynamic mechanism design approach

Operations Research 64 (2): 371–389
Shouqiang Wang, Peng Sun, Francis de Véricourt (2016)
Abstract:
Subject(s): Management sciences, decision sciences and quantitative methods, Product and operations management
Keyword(s): Dynamic mechanism design, optimal control, asymmetric information, environmental regulation, voluntary disclosure

This paper studies the design of voluntary disclosure regulations for a firm that faces a stochastic environmental hazard. The occurrence of such a hazard is known only to the firm. The regulator, if finding a hazard, collects a fine and mandates the firm to perform costly remediation that reduces the environmental damage. The regulator may inspect the firm at any time to uncover the hazard. However, because inspections are costly, the regulator also offers a reward to the firm for voluntarily disclosing the hazard. The reward corresponds to either a subsidy or a reduced fine, depending on whether it is positive or negative. Thus, the regulator needs to dynamically determine the reward and inspection policy that minimizes expected societal cost in the long run. We model this problem as a dynamic adverse selection problem with costly state verification in continuous time. Despite the complexity and generality of this setup, we show that the optimal regulation policy follows a very simple cyclic structure, which we fully characterize in closed form. Specifically, the regulator runs scheduled inspections periodically. After each inspection, the reward level decreases over time until a subsequent inspection takes place. If a hazard is not revealed, the reward level is reset to a high level, restarting the cycle. In contrast to the reward level, the mandated remediation level is constant over time. Nonetheless, when subsidies are not allowed in the industry, we show that the regulator should dynamically adjust this remediation level, which then acts as a substitute for a subsidy. Our analysis further reveals that optimal inspection frequency increases not only when the inspection accuracy decreases, but also when the penalty for not disclosing the hazard increases.

© 2016 INFORMS

Volume 64
Issue 2
Pages 371–389

Journal Article

Anatomy of a contract change

American Economic Review 106 (2): 316–358
Published as NBER Working Paper No. 19849 under the title Productivity response to a contract change
2016 KfW Research Prize for Excellence
Abstract:
Subject(s): Economics, politics and business environment
Keyword(s): Labor contracts, incentives, behavioral economics, plantations
JEL Code(s): D82, D86, J33, J41, J43, O13, Q12

We study a contract change for tea pluckers on an Indian plantation, with a higher government-stipulated baseline wage. Incentive piece rates were lowered or kept unchanged. Yet, in the following month, output increased by 20 to 80 percent. This response contradicts the standard model and several variants, is only partly explicable by greater supervision, and appears to be "behavioral." But in subsequent months, the increase is comprehensively reversed. Though not an unequivocal indictment of "behavioral" models, these findings suggest that nonstandard responses may be ephemeral, and should ideally be tracked over an extended period of time.

Copyright © 2016 by the American Economic Association.

Volume 106
Issue 2
Pages 316–358

Journal Article

Conflict resolution, public goods and patent thickets

Management Science 62 (3): 704–721
An abridged version of this article was previously published in the AOM Best Paper Proceedings
2015 Darmstadt Innovation Research Best Paper Award
Dietmar Harhoff, Georg von Graevenitz, Stefan Wagner (2016)
Abstract:
Subject(s): Entrepreneurship
Keyword(s): Microeconomic behavior, industrial organization, firm objectives, organization and behavior, market structure, firm strategy, market performance, patent system, patent litigation
JEL Code(s): K11, K41, O34

Postgrant validity challenges at patent offices rely on the private initiative of third parties to correct mistakes made by patent offices. We hypothesize that incentives to bring postgrant validity challenges are reduced when many firms benefit from revocation of a patent and when firms are caught up in patent thickets. Using data on opposition to patents at the European Patent Office we show that opposition decreases in fields in which many others profit from patent revocations. Moreover, in fields with a large number of mutually blocking patents, the incidence of opposition is sharply reduced, particularly among large firms and firms that are caught up directly in patent thickets. These findings indicate that postgrant patent review may not constitute an effective correction device for erroneous patent grants in technologies affected by either patent thickets or highly dispersed patent ownership.

© 2016 INFORMS

Volume 62
Issue 3
Pages 704–721

Journal Article

What do patent-based measures tell us about product commercialization? Evidence from the pharmaceutical industry

Research Policy 45 (5): 1091–1102
Stefan Wagner, Simon Wakeman (2016)
Abstract:
Subject(s): Entrepreneurship, Technology, R&D management
Keyword(s): Patent indicators, patent system, product commercialization, pharmaceutical industry, drug development

Patent-based measures are frequently used as indicators in empirical research on innovation and technological change. Currently, there is little evidence as to what extent patent-based indicators relate to product market outcomes. Using a unique dataset that links outcomes from product commercialization in the pharmaceutical industry with detailed patent data, we relate patent-based indicators that capture either an invention’s value or the uncertainty surrounding the patenting process to the outcomes of the product development process. Our findings suggest that the speed of commercialization increases with value but reduces with uncertainty. Using a variety of alternative indicators we derive implications for the use and the proper interpretation of individual measures. Moreover, our study has broader implications as it highlights the detrimental effect of uncertainty on the speed of innovation.

With permission of Elsevier

Volume 45
Issue 5
Pages 1091–1102

Journal Article

Efficient feed-in-tariff policies for renewable energy technologies

Operations Research 64 (1): 52–66
Saed Alizamir, Francis de Véricourt, Peng Sun (2016)
Abstract:
Subject(s): Management sciences, decision sciences and quantitative methods, Product and operations management
Keyword(s): Technology diffusion, government incentive policies, renewable energy technology, feed-in tariff, learning-by-doing, dynamic programming

Feed-in-tariff (FIT) policies aim at driving down the cost of renewable energies by fostering learning and accelerating the diffusion of green technologies. Under FIT mechanisms, governments purchase green energy at tariffs that are set above market price. The success or failure of FIT policies, in turn, critically depend on how these tariffs are determined and adjusted over time. This paper provides insights into designing cost-efficient and socially-optimal FIT programs. Our modeling framework captures key market dynamics as well as investors' strategic behavior. In this framework, we establish that the current practice of maintaining constant profitability is theoretically rarely optimal. By contrast, we characterize a no-delay region in the problem's parameters, such that profitability should strictly decrease over time if the diffusion and learning rates belong to this region. In this case, investors never strategically postpone their investment to a later period. When the diffusion and learning rates fall outside the region, profitability should increase at least temporarily over some time periods and strategic delays occur. The presence of strategic delays, however, makes the practical problem of computing optimal FIT schedules very difficult. To address this issue, the regulator may focus on policies that disincentivize investors to postpone their investment. With this additional constraint, a constant profitability policy is optimal if and only if the diffusion and learning rates fall outside the no-delay region. This provides partial justifications for current FIT implementations.

© 2015 INFORMS

Volume 64
Issue 1
Pages 52–66

Pages