HBS Theses and Dissertations
Permanent URI for this collectionhttps://dash.harvard.edu/handle/1/13398959
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Publication A simplicial algorithm for concave programmingWilson, Robert B.; Lukens, ColinPublication Essays on Emergency Department Physician Performance(2020-10-28) Imanirad, Raha; Raman, Ananth; Saghafian, Soroush; Buell, RyanIn this dissertation, I examine the problem of physician performance evaluation and investigate ways to improve the performance of physicians in the context of an Emergency Department (ED) setting. In the first chapter — co-authored with Soroush Saghafian and Stephen Traub — we use Data Envelopment Analysis (DEA) to develop models for evaluating physician effectiveness and efficiency. We apply our DEA models to a large dataset of care delivered by ED physicians and derive effectiveness and efficiency scores for the physicians in our dataset. Using the generated DEA scores, we then conduct a second-stage analysis in which we use a Tobit framework to identify factors that are associated with higher levels of physician effectiveness and efficiency. In the second chapter — co-authored with Soroush Saghafian and Stephen Traub — we conduct a large-scale empirical investigation into whether and how physicians who work during the same shift affect each other’s performance. We find strong empirical evidence that physicians affect each other’s speed and quality in our setting. We identify spillover from peers’ utilization of shared resources as the main driver of the observed effects and show that during high-volume shifts, the magnitude of the effects increases. We draw conclusions from our results and discuss how they can be utilized by hospital administrators to improve the overall performance of physicians. In the third chapter — co-authored with Soroush Saghafian and Stephen Traub — we address the question: To which shift should the ED’s high-performing physicians be assigned? Specifically, we empirically examine how assigning a high-performing group of physicians to different shifts of the day affects the daily performance of the ED. Our results demonstrate that assigning a group of high-performing physicians to the first shift of the day has the highest impact on the daily performance of the ED. We further show that physicians’ performance in the earlier shifts of the day has a “domino effect” throughout the rest of the day. Together these studies provide insights into ED physician performance and shed light on potential ways to improve performance through assigning the right mix of physicians to the right shifts.Publication Finding and Keeping Stars: The Leadership Performance and Retention of High PotentialsSpain, Everett; Groysberg, Boris; Snook, Scott A.; Mukunda, GautamHigh potentials (HI-POs) are employees who are most likely to become their organizations' top performers and senior leaders. Identifying HI-POs early and understanding the factors involved in their retention can help organizations strategically invest in their future. This dissertation explores how to identify and retain HI-POs across three related chapters (papers), two of which examine U.S. Army officers, and one of which examines corporate leaders. The first chapter identifies which traits and performance factors predict that young leaders will become their organizations' highest performing leaders. This illuminates the challenges of defining high performance, such as the potential organizational tension between favoring action-oriented employees versus contemplative-oriented employees. It also shows that junior employees' job performance ratings, if force-distributed and repeated over time with different bosses, strongly predicts high leadership performance up to fifteen years later. Additionally, it finds intellectual ability may be punished by organizations, and suggests the construct of the Criteria-Needs Mismatch (CNM) as a potential explanation of this phenomenon. Having identified HI-POs within a larger population of young leaders, the second chapter comprehensively tests the factors that predict their turnover dynamics over short, medium, and long stays in their organization. Also, it explores the concept of Functional Human Capital, a subset of Industry Human Capital that suggests employees who are trained in different technical fields within the same organization will experience different levels of portability than employees trained in non-technical fields. Therefore, Function Human Capital may provide an additional lens towards understanding turnover behavior. The third chapter, co-authored with Boris Groysberg, explores the current applications and best practices for one of the most widely used, yet least understood, methods for understanding turnover: the Exit Interview and Survey (EIS). By studying EIS programs across various industries, geographies, and organizational sizes, we find most existing EIS programs do not produce positive changes for their organizations, and that there is no one-size-fits-all template for creating an effective EIS program. Through integrating the literature, analysis, and global best practices, we present four recommendations for designing EIS programs that are capable of unlocking significant value for their organizations.Publication Essays on competitive strategy in regulated industries: Evidence from commercial bankingWilson, Kristin Elizabeth; Oberholzer-Gee, Felix; Yao, Dennis; Siegel, JordanThis dissertation studies heterogeneity in firm performance that arises from market failures and the regulation of market failures in the commercial banking industry. The first essay explores the heterogeneity in firm performance that can arise from exogenously varying levels of oversight in regulated industries. We show that banks located closer to their examination field offices face lower supervision costs that are not explained by leverage. This suggests that regulatory oversight is not purely a burden, but that closer ties with supervisors bring advantages to firms. We hypothesize that these advantages accrue due to co-located banks' lower costs of information exchange. In support of this conjecture, we find that large banks do not benefit disproportionately from proximity to their supervisor, as a collusion-driven explanation would suggest. The second essay explores whether incumbent firms enjoy a strategic advantage in reducing uncertainty about future demand in highly cyclical industries. I consider this question by studying sources of heterogeneity in financial institutions' ability to manage risk exposures for a highly cyclical, competitive line of business: construction loans. Firms with early investment experience in the construction business demonstrate superior screening capabilities relative to competitors during the building boom. Despite this advantage in identifying idiosyncratic risks across borrowers, experienced banks do not outperform their competitors in limiting their exposure to market risk. The third essay considers whether the the organization of regulatory enforcement agencies impacts whether regulators' intervene pro-actively in markets, and how regulators respond after a market crisis. I focus on the dramatic growth and equally dramatic collapse of construction lending in the US commercial banking industry as a case study for a highly regulated boom and bust market. I identify differences in policy implementation across firms panel data on banks' supervising agency's structure, resources, and funding incentives, as well as bank examiner turnover and compensation. Among agencies, I do not find differences in the regulation of underwriting quality or in pre-crisis construction market exposures. However, regulatory regime has a significant impact on the rate at which lending contracts after the housing market collapse. Overall, this study shows that differences in the regulatory oversight environment are not necessarily readily apparent in ``boom" markets but likely to have a significant impact on performance in times of crisis.Publication Essays in Financial Accounting Standard SettingAllen, Abigail McIntosh; Healy, Paul; Ramanna, Karthik; Palepu, KrishnaThis dissertation consists of three essays that explore the financial accounting standard setting process. In the first, I examine the extent to which the FASB's agenda determination is a function of the contemporaneous preferences of its primary constituents: auditors, preparers, and financial statement users. Using the FASB's consultation with the FASAC as a lens through which to view constituent preferences, I find evidence that from 1982 to 2001 influence on FASB agenda decisions is concentrated among "Big N" audit firms, whereas from 2002 to 2006 the preferences of financial constituents appear to be most significant. Across both periods, I find no evidence of significant preparers' influence in agenda formation, which is in contrast to their documented role in later stages of standard setting. The second essay, written with Karthik Ramanna and Sugata Roychowdhury, examines how tightening of the U.S. auditing oligopoly--from the Big 8 to the Big 4--has affected incentives of the Big N as manifested in their lobbying preferences on accounting standards. We find, as the oligopoly has tightened, that Big N auditors are more likely to express concerns about decreased "reliability" of FASB-proposed accounting standards (relative to an independent benchmark). Robust to controls for various alternative explanations, our results are consistent with Big N auditors facing greater political and litigation costs attributable to increased visibility from the tightening oligopoly and decreased competitive pressure to satisfy client preferences. The results are inconsistent with the claim that Big N auditors increasingly consider themselves "too big to fail" as the audit oligopoly tightens. The third essay, written with Karthik Ramanna, investigates the effect of standard setters in standard setting. We examine how certain professional and political characteristics of FASB members and SEC commissioners predict the accounting "reliability" and "relevance" of proposed standards. Notably, we find FASB members with backgrounds in financial services to be more likely to propose standards that decrease "reliability" and increase "relevance," partly due to their tendency to propose fair-value methods. We find opposite results for FASB members affiliated with the Democratic Party, although only when financial-services background is excluded as an independent variable.Publication Truth or Dare: Management Theory at a CrossroadsFung, Ray; Christensen, Clayton; Shih, Willy; Kuppuswamy, VenkatThis dissertation examines the state of management theory, whether as espoused by the (largely self-proclaimed) gurus, or by management academics. Given that philosophers of science have determined that theory is supposed to provide reliable, non-obvious predictions I test whether management theory meets those requirements. I examine certain famous guru works for reliability through a case-study method. I examine the published results of management academia through a statistical analysis. I examine the non-obviousness of published management academia's hypotheses through a series of interviews and by posing a survey of those hypotheses to volunteers untrained in management knowledge to determine whether they find those predictions to be obvious. Management theory is currently found to be wanting. However, I then propose a set of prescriptions that might allow management to become a truly progressive discipline as well as what management academics and gurus could fruitfully deliver to audiences todayPublication Essays on Cognition in StrategyMenon, Anoop Ramachandran; Gavetti, Giovanni M; Yao, Dennis A; Alcacer, Juan; Shleifer, AndreiThis dissertation explores some of the implications of a richer conceptualization of human cognitive processes on three strategically important phenomena. Each essay explores its phenomenon of interest using findings on cognition from different fields including cognitive neuroscience, cognitive psychology, and social psychology, among others, and uses this cognitive perspective to generate novel predictions. The first essay explores the process by which decision makers make subjective forecasts, that is, forecasts that are based on subjective estimates and "gut feeling" as opposed to a rational decision calculus. It develops a parsimonious model of this process that is fundamentally based on the associative nature of information processing in the mind. The model has some counter-intuitive properties and is able to account for some well-documented cognitive "biases". Finally, when applied to strategic forecasting settings of significant complexity that entail deliberation, it generates some novel predictions. The second essay explores the phenomenon of creative strategic leaps, that is, the phenomenon whereby the leaders of some firms are able to identify radically different strategic opportunities from the status-quo of the industry. The essay models these mental leaps as re-categorizations of strategic situations by these leaders. It develops a formal, micro-founded model of categorization that is based on findings from multiple disciplines including cognitive psychology, social psychology, cognitive neuroscience and marketing. The model is then used to propose two techniques that could increase the chances of making such novel mental leaps. The final essay explores the emotional impact of the prior performance of a firm on its strategic decision making process, specifically on the distance of its strategic search and choices. It identifies a few robust mechanisms from cognitive psychology, cognitive neuroscience and behavioral economics relating to the impact of emotions on cognitive functioning, and then integrates and applies them to generate two hypotheses. The hypotheses make empirically testable predictions on the M&A choices of firms, which are then tested using a large panel dataset. Strong support is found for the predictions in the data.Publication Shifting Loci of Innovation: A Study of Knowledge Boundaries, Identity and Innovation at NASALifshitz-Assaf, Hila; Tushman, Michael Lee; Lakhani, Karim; Anteby, MichelThis dissertation explores how the ability to innovate is being transformed by the Web and the information age, as well as the challenges and opportunities the transformation entails. This research interest is fueled by the possibility that innovation today is on the verge of fundamental shifts in the mechanisms used and the capabilities developed for knowledge creation. The qualities of this shift are not yet well understood and its true impact still requires precise observation. This period of transition is fertile ground for researching the institutions that are affected by these changes. To this end I study the micro foundations of innovation. I study the underlying processes, roles and social dynamics that are the foundation of innovation initiatives in organizations. While most of the literature about Web-based innovation models investigates online communities, my focus is on their influence on organizations, on the intersection of these two seemingly contrasting worlds. My dissertation is based on an in-depth longitudinal field study at NASA, exploring their experimentation with opening knowledge boundaries through web platforms and communities. I begin with exploring how the process of knowledge and innovation production is impacted by using open innovation, and how it co-evolved with a significant shift in the professional identity of R&D organizational members. I then theoretically model when technological and scientific problems can be solved successfully through open innovation and use this model to offer an analytic framework for understanding how organizations shift the boundaries of their innovation process, emphasizing the importance hybrid innovation architectures. Lastly, I describe two facets of my future research. I explore the emergent process of cross boundary problem formulation that takes place when the problem formulation is decoupled from problem solving, opening the solution space for innovative solutions. I also explore the varied impacts using open innovation has on incumbent organizations, their identity, capabilities and design. I end with open questions and offer my reflections on organizing for innovation in the 21st century.Publication Director Heterogeneity and its Impact on Board EffectivenessWahid, Aida Sijamic; Healy, Paul M; Srinivasan, Suraj; Yu, GwenIn the first section of the dissertation, I examine whether boards that are heterogeneous along six dimensions--age, gender, race, tenure, rank, and function--perform their most critical tasks better than boards that are more homogeneous. Using director information obtained from multiple sources and supplemented by extensive hand-collection, I estimate board heterogeneity along each of the dimensions and two aggregate measures of board heterogeneity: demographic and occupational. I find that occupationally diverse boards exhibit significantly higher CEO performance-turnover sensitivity, greater likelihood of significantly improved performance following CEO replacement, and lower excess compensation. The findings are mainly driven by tenure and rank heterogeneity. There is no evidence that any dimension of the demographic heterogeneity impacts board effectiveness in a statistically meaningful way. In the second section of the dissertation, I explore why certain dimensions of heterogeneity seem to impact board effectiveness more than others. Focusing on gender, I show that director heterogeneity improves board effectiveness for the subset of firms that committed to diversity prior to regulatory pressures, but not for the subset of firms that changed the director mix in response to external calls for diversity. This finding points to tokenism as the likely explanation for lack of impact of demographic heterogeneity on boards' ability to act effectively. Consequently, it suggests that imposing regulatory pressures on firms to increase the level of diversity may not make boards more effective: although director heterogeneity can improve board effectiveness, such improvement may not be achieved if heterogeneity is adopted in response to regulatory pressures rather than voluntarily.Publication Private Equity's Diversification Illusion: Economic Comovement and Fair Value ReportingWelch, Kyle T.; Healy, Paul; Lerner, Josh; Ramanna, Karthik; Riedl, Edward; Wang, CharlesThis study examines how financial reporting practices have shaped private equity's claims to diversification. Despite research showing that private equity lacks unique economic exposure, private equity firms and trade associations continue to promote private equity's diversification as a key investment benefit. I show that returns based on prior methods of valuation understate the economic comovement of private equity with the market, creating a diversification illusion. As private equity valuation methodologies have changed private equity returns reveal increased systematic risk and correlation to equity markets. Moreover private equity firms also encounter higher--not lower--costs when accessing capital under new valuation methods, a finding at odds with public--market research.