HBS Theses and Dissertations

This paper investigates how recent institutional developments impact the potential channels, and thus available discretion, by which managers can manipulate reported fair values. First, I use extensive field research to document the mechanisms used by banks to procure and report fair values—particularly incorporating the impact of the 2011 FINRA’s Trade Reporting and Compliance Engine (TRACE), and concurrent increase in independent third-party vendors. Key insights include that (i) banks predominantly apply third-party vendors’ feeds to generate financial statements (with nearly 100% of vendors’ feeds passing automatically to reported financial statements, with only rare adjustments); and (ii) external auditors predominantly relying on different vendors’ prices to verify and challenge banks’ inputs. Second, I employ three proprietary datasets of daily financial-instrument level pricing—capturing both TRACE and third-party vendors—to document the following insights. I find that vendors’ evaluated prices dominate historical costs in all performance metrics, confirming they provide a more accurate, objective, and reliable proxy for fair value than historical cost. I also find that vendors’ fair values are value-relevant and account for 90% of the trade-to-trade price variance, creating an upper bound on managerial discretion (of only 15% of the original level). Finally, I find that bank managers respond to these newly imposed constraints by alternatively engaging in more spoofing-transaction based fair value manipulations: suggesting this is a likely (even primary) channel by which manipulation can be attained. Overall, the evidence suggests that fair values, particularly after the above institutional developments, appear less subjective, less costly to implement, and more convenient for auditors to verify and challenge, than the literature has previously reported.

This dissertation provides empirical evidence from high-stakes field settings of how productivity and quality are affected by workers' deviations from prescribed processes. The first essay of the dissertation explores the role of experimentation in field settings to investigate the drivers of performance and how to implement this methodology to answer relevant operational questions rigorously. This dissertation then uses field data from proprietary sources to investigate the behavioral drivers of process variation and their effects on productivity and quality. In particular, the next two essays of this dissertation consider the effects of (1) how workers' decisions are influenced by task schedules and (2) how workers' decisions exert influence on task schedules. Many tasks are decisions, which are thus subject to human decision errors. How does scheduling affect how humans-in contrast to machines-perform these tasks? To explore this question, the second essay focuses on one critical task: quality evaluations. The accuracy of quality evaluations is critical to their being a useful input to key managerial decisions, to penalize compliance failures, and to motivate quality improvements. Yet, task-scheduling factors that are related to the workers' work structure (but unrelated to the task itself) could shape workers' predisposition toward the task and subsequent performance. We explore how inspection scheduling can affect inspection quality by influencing bias. Analyzing thousands of food safety inspections, we find that inspection results are affected by when the inspection occurs within an inspector's daily schedule and by inspectors' experience at their prior inspection of a different establishment. For example, the more compliance deterioration found in an inspector's prior inspected establishment, the more violations cited in the inspector's next inspection (of a different establishment). Consistent with negativity bias, this effect is asymmetric, applying when compliance at the inspector's prior establishment deteriorates but not when it improves. Overall, by identifying factors that bias inspections, our work contributes to the literature on monitoring, quality improvement, and scheduling. Our work also suggests a cost-effective lever: exploiting the behavioral effects of the organization of work. Task scheduling is not always a managerial decision. Those who execute tasks often have discretion over the order in which to perform them. How do these choices affect productivity and quality? The third essay of this dissertation focuses on the drivers and consequences of exercising discretion to "deviate" from a prescribed task sequence. Analyzing 2.4 million decisions, we find that radiologists prioritize similar tasks (grouping tasks into batches) and those tasks they expect to complete faster (shortest expected processing time). Exploiting random assignment of tasks to doctors' queues, instrumental variable estimates reveal that both of these types of deviations erode productivity. Actively grouping similar tasks reduces productivity, in stark contrast to productivity gains from exogenous grouping, indicating deviation costs outweigh benefits from repetition. We also find learning-by-doing in exercising discretion, with doctors deviating more often and more productively over time. Our results highlight the tradeoffs between the time required to exercise discretion and the potential gains from doing so, which has implications for managers deciding task sequence assignments and system design. Together, these essays generate new scholarly insights regarding the connections between operational factors, decision-making, and performance by analyzing data from high-stakes field settings. In doing so, this research seeks to contribute to theory while also improving management practice.

Consumers attitudes towards products and brands are rapidly changing. The democratization of luxury has made products of quality more available and the internet has facilitated access to information that was previously not in hand. How do consumers react to these changes? And, in what effective ways should brands respond to consumers’ shifting values and behaviors? This dissertation attempts to answer these questions in three essays by investigating some paradoxical effects of luxury consumption, social comparison, and brand secrecy in the new world on consumers symbolic consumption and behavior. The first essay highlights a tension between consumers’ desire for an aspirational lifestyle and the growing demand for authentic living. I suggest that aspirational luxury products may conflict with consumers self-views, making them feel inauthentic. The second essay demonstrates an unexpected effect of upward social comparison on compensatory consumption. Thanks to online social media, consumers constantly encounter displays of others’ success. I find that upward comparisons in one domain may lead consumers to prefer status enhancing items in an alternative identity domain, in which they fare more favorably. I investigate the domains consumers pivot to, and compare the prevalence and appeal of the “status pivoting” behavior. Lastly, the third essay explores an emerging phenomenon of brand’s pseudo-secrecy. I suggest that when brands offer consumers an opportunity to attain seemingly secret information about publicly available products, such as secret menus or hidden stores, they increase their subjective experience of social centrality, which in turn positively impacts word-of-mouth and purchase behavior in the marketplace. I use a mixed-methods approach, combining field studies, lab experiments, a netnographic analysis, observational studies, and qualitative interviews with consumers, to gain a comprehensive understanding of these phenomena, and examine their prevalence and impact in real-world settings.

The rising levels of ambiguity, uncertainty, and dynamism organizations face today prompt groups and their members to step outside of the boundaries of their formal job descriptions in order to fulfill the shifting demands of their work. This scenario opens up exciting opportunities for them to redefine who they want to become and what they wish to contribute to their organizations. In this dissertation, I explore the process of collective job crafting, which I define as the coordinated action by the members of a group to alter the tasks, relationships, and meanings of the work associated with the group’s formal mandate. Through mechanisms that link the individual and group levels over time, collective job crafting enables the group to progressively enhance its knowledge base, to broaden its sphere of influence, and to define and enact a new identity. My findings are grounded in a longitudinal inductive qualitative study of collective job crafting at Media Solutions, a unit at CLICK, a leading social media company. Through rich interview, observation, and archival data, I trace the collective job crafting trajectory of the unit throughout its 7-year history. What began as an isolated unit in charge of a very simple and specialized task transformed itself into one of the most interconnected groups at the organization, performing complex and impactful work. However, not all areas of the organization supported Media Solutions’ collective job crafting initiatives to the same extent. As time passed, the unit’s view of the world and that of the top managers to whom it reported progressively differed. Questions such as “How should CLICK create and capture value?” “What are our strategic priorities?” “What type of work is considered valuable?” and “Who gets to do that kind of work?” received increasingly different answers. Media Solutions was eventually dissolved during the course of a larger reorganization process. The ebbs and flows of Media Solutions’ trajectory provide the raw materials for my theory of collective job crafting, which I develop from two complementary viewpoints. First, I examine the components of collective job crafting as an informal process, grounded in Media Solutions’ proactive and adaptive behavior. Subsequently, I provide a longitudinal view of collective job crafting and analyze key instances throughout Media Solutions’ self-driven evolution in which the unit negotiated formal ownership of different components of its collectively crafted job, with varying degrees of success. This study contributes to the incipient literature on job crafting by exploring a form of job crafting that occurs at the group level (rather than at the individual or interpersonal levels) and unfolds both within and beyond group boundaries. My findings also provide a glimpse into how emergent organizational designs and strategies arise, gain traction, and are eventually thwarted by inertial forces.

This dissertation addresses institutional development in emerging economies, as well as its implications on firm strategy. Specifically, as emerging markets are characterized by “institutional voids”, that is, the absence of information or contracting intermediaries that effectively connect economic agents, I take imperfect information as a defining characteristic of emerging economies, and investigate how the ever-increasing societal demand for information disclosure and transparency affects firm behavior and competiveness. The three chapters of my dissertation examine “institutional voids” at product markets, labor markets and capital markets, respectively. In examining these questions, I utilized various empirical methods including natural, field and online survey experiments, and large-sample dataset econometric analyses.

In this paper I examine how one construction management company uses contract design and incentive design to respond to aspects of task complexity and relationship complexity present in its construction projects. In terms of contract design, I find that the company is unable to increase its use of cost-plus pricing when faced with technically complex projects. Instead, the company uses increased pre-execution design modification and price markups when technically complex projects are contracted with fixed-pricing. Further, I find that design modification is only margin-improving when used in projects that are both technically complex and fixed-price and that price markups are only margin-improving when projects are fixed-price. In terms of incentive design, I find that the company provides more qualitative feedback to employees and quantitatively rates employees with less centrality bias (i.e. more dispersed ratings) when employees work on fixed-price projects. Further, when employees work on fixed-price projects, they are granted greater average financial rewards, their financial rewards are relatively more based on input-behaviors (i.e. less based on output-results), and their bonuses, raises and promotions appear to be awarded with more managerial discretion (i.e. are less systematic.)

My dissertation is composed of three papers examining consumer decision-making in the context of close, personal relationships. Countless consumer decisions, from small (e.g., bringing soup to a sick friend) to large (e.g., buying a house with a partner), require consumers to consider and incorporate not only their own feelings and preferences, but also the feelings and preferences of close others. Because close relationships are characterized by high interdependence, commitment, and investment, they exert a profound influence on consumers’ thoughts, feelings, and behaviors. Therefore, in my dissertation, I investigate how consumers make decisions that involve close others and how these decisions affect their well-being and relationships.

The first essay (A Preference for Effort when Caring for Close Others) examines how consumers respond to products designed to make it easier to take care of close others—ranging from pre-made meals to robo-cribs that automatically rock babies back to sleep. A series of experiments demonstrate that using effort-reducing products to care for close others taints consumers’ self-perceptions as caregivers. The second essay (Shared Time Scarcity and the Pursuit of Extraordinary Experiences) demonstrates that consumers prioritize extraordinary experiences when they perceive the shared time with relationship partners as scarce. The third essay (Sacrificing Enjoyment for the Sake of the Relationship) examines when and why consumers forgo the objective quality of an experience to obtain interpersonal benefits—for example, when flying with a partner and forgoing two non-adjacent seats in the economy-comfort section. I conclude with a discussion of my future research agenda.

This research investigates the continuum of choice—unseen, unanticipated causes and consequences of consumer decisions. Three essays investigate hidden factors that influence the choices we make, subtle ways to affect choice at the moment of execution, and the overlooked signals that our choices convey (correctly or incorrectly) about us to others. Essay one investigates the perverse tendency to hope for the worst: when faced with a difficult decision (e.g., whether or not to have surgery), people can paradoxically feel subjectively better with—and even actively prefer—objectively worse but certain news (e.g., “95% chance of a disease”) over objectively better but more uncertain news (e.g., “50% chance of a disease”). This, in turn, has the potential to meaningfully change people’s subsequent choices and preferences in unexpected ways. Essay two examines a subtle intervention to change people’s decisions about engagement levels: arbitrarily grouping discrete tasks or items together as part of an apparent “set” motivates people to reach perceived completion points—or finish a pseudo-set—even in the absence of extrinsic incentives. Essay three explores the judgments people make after observing others’ choices; specifically, upon learning of someone’s choice of one option, people erroneously believe that person must dislike dissimilar options, leading to a pervasive and systematic prediction error.

Online advertising continues to evolve at a rapid as the internet and the digital marketing landscape mature. Firms face new challenges in acquiring, engaging and retaining customers. Entire new markets and technologies have grown out of the race digital marketing dominance. This dissertation aims to examine some of these advances and offer practical insights for today’s firms that need to navigate this new world. In the first essay, I explore the effects of user attention to online display advertising. Using two observational studies, I show that attention is highly heterogeneous and predictable during the user browsing session. The implications are that publishers should be more selective in ad placement and that advertisers should be more selective in ad purchases. The second essay examines how programmatic advertising firms should efficiently allocate ads in real-time bidding environments on behalf of their client advertisers. I introduce the demand side platform problem which is related to both the adwords and publisher problems, but distinct in that the supply of ad space assumed unlearnable. I provide a real-time mechanism for efficient ad allocation in this setting and demonstrate efficacy using real-time bidding data. In the final essay, I examine cross-merchant spillovers in coalition loyalty programs. I examine a natural experiment where a large grocery store joined a large loyalty program coalition. Using a quasi-difference-in-difference approach and Bayesian Structural Time Series for causal inference, I find that adding a large complementary merchant into a coalition loyalty program increases sales and purchase frequency of existing customers at existing merchants.

This dissertation examines how individuals in the upper echelons of the organization – namely, the board of directors, CEO, and top management team – shape firm governance, strategy, and performance. This dissertation starts with a broad analysis of board effectiveness and then narrows in focus to one particular board responsibility (CEO succession planning), and then one particular type of CEO transition (leapfrog CEO succession) in the two subsequent chapters. Through this dissertation, I advance our understanding of how board directors and executives influence the organizations around them by developing insights into how boards and top management teams operate internally and integrating these insights into large-sample empirical analyses. The first chapter of this dissertation uses a large-sample survey to explore drivers of board effectiveness on three primary board responsibilities. This study emphasizes the role that internal board operations play in explaining directors’ perceptions of their boards’ effectiveness. The second chapter uses a mixed-methodology approach to examine one specific board responsibility: CEO succession planning. This study identifies the basic components of a board-level CEO succession plan and highlights the role of the CEO/board relationship and risk management processes in supporting these processes. The third chapter examines a specific type of CEO transition: leapfrog CEO succession. This study analyzes the environmental antecedents and performance consequences of appointing an internal candidate who is fast-tracked past more senior executives as CEO.

The classic economic concept of the tragedy of the commons occurs when individuals overuse a public good, resulting in the complete depletion of the good. Comparatively, in the digital world public goods are non-rival and essentially infinitely abundant. However, the nearly infinite supply of a public digital good can still be tragic, albeit in a different manner. For example, the rise of the free crowdsourced digital good Wikipedia essentially destroyed billions of dollars of economic value in the encyclopedia industry. Despite this apparent destruction of value, the reduction in prices for many digital goods also represents a great opportunity. Firms are increasingly relying on the crowd to help shape future products, provide value for their customers, and build software crucial to the firm’s production process. This phenomenon is leading to a weakening of firm boundaries and a change in the nature of the firm’s innovative processes. My dissertation is comprised of four studies that explore this phenomenon to better understand the transformative nature of the digital commons.

The first chapter, “Innovating Without Information Constraints: Organizations, Communities, and Innovation When Information Costs Approach Zero” (w/ Elizabeth Altman, and Michael Tushman), explores how technological progress and reductions in information costs are leading firms to increasingly engage with external digital communities. In particular, firms are increasingly engaging with networks of developers, external labor marketplaces, and users, with the latter frequently occurring through the process of crowdsourcing. This engagement leads to a weakening of firm boundaries such that the locus of innovation and value creation moves outside the boundaries of the firm. The increase in this phenomenon motivates a reevaluation of many traditional theories of how firms organize and innovate. Specifically, we consider how shifts in information costs affect the classic organizational concepts of firm boundaries, business models, interdependence, leadership, identity, search, and intellectual property. In turn, these effects on the firm’s organization alter how the firm innovates.

The second chapter, “Digital Dark Matter and the Economic Contribution of Apache” (w/ Shane Greenstein) examines the impact of crowdsourced digital goods at a macro-level. We show that due to its reliance on price to measure value, GDP calculations do not account for “digital dark matter”, digital goods and services that are non-pecuniary and effectively limitless inputs into production. We scan 1% of the 1.5 billion IP addresses in the United States to measure the types of web servers businesses and individuals employ. We estimate the value of the free and open source nature of the predominant web server, Apache, by comparing it to the closest pecuniary alternative, Microsoft’s Internet Information Services (IIS) server. Our analysis shows that the lack of price for the Apache server leads to an underestimation of GDP by upwards of $12 billion. Although this is the value from only one piece of digital dark matter, this miscalculation represents a large proportion of all software sales and significantly alters economic growth projections.

The third chapter, “Crowdsourced Digital Goods and Firm Productivity: Evidence from Open Source Software”, empirically measures the firm-level productivity impact of managers’ decisions to use non-pecuniary digital inputs from the crowd. Existing literature examining the impact of IT on productivity does not account for investments in such goods, as their use cannot properly be captured by traditional measurement methods based on price. Therefore, their contribution to the firm’s production process is currently unexplored, despite mounting evidence that firms are increasingly relying on these types of inputs. Employing data from a survey of technology use at nearly 2,000 firms over 10 years, I find that a 1% increase in the amount of non-pecuniary open source software (OSS) used by a firm leads to a .073% increase in productivity. This translates to a $1.35 million increase in productivity for the average firm in my sample. This is more than double the magnitude of the coefficient on investments in traditional pecuniary IT capital. I find that this effect is greater for larger firms and for firms in the services industry. I use inverse probability weighting, instrumental variables, firm-fixed effects and data on managerial quality from the World Management Survey to add support to a causal interpretation of these results.

The final chapter of my dissertation, “Organizational Learning Through Contributing to Public Goods: Evidence from Open Source Software,” builds on the concepts developed in the other three to explore how firms that engage external communities and contribute to the development of crowdsourced digital goods enhance their ability to extract value from technology-related inputs via increased learning about how these complex goods operate. This study explores this mechanism by using data on firm contributions to Linux, an OSS operating system that is an important public digital good created via crowdsourcing. Using coarsened exact matching and inverse probability weighting to address endogeneity concerns, this study shows that firms who contribute to the development of OSS capture more productive value from the use of OSS than their non-contributing peers through a process similar to absorptive capacity. Further, this learning has a spillover effect that allows contributing firms to capture more productive value from all of their IT investments, not just OSS.

Together, the results of these four studies show that the digital commons can help create a great deal of economic value, but that this value is difficult to measure via standard economic methods that rely on price to reflect value. These results have important strategic implications for managers and policy makers to consider as organizations increasingly engage with external communities and ecosystems to innovate and create value.

In 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.

Firms spend significant resources on compliance training, but it is often criticized as being cosmetic. Using proprietary records on compliance training and allegations of misconduct from a large multinational firm, I investigate whether compliance training decreases corporate misconduct. I find that in-person training impacts employee behavior but do not find evidence for video training, which indicates that compliance training can be effective when employees are attentive. However, this effect lasts for only two months, suggesting that compliance training only temporarily raises awareness. I also find that the effectiveness of training is curtailed by employees’ economic incentives to misbehave, such as high performance pressure and weak public enforcement. Overall, this study advances our understanding of how and when compliance training can impact employee behavior and describes its limitations.

Transparency is one of the great cross-disciplinary themes of management and organizations today. Increases in transparency, or accurate observability, of activities, routines, behaviors, strategies, output, and performance promises higher performance through improved learning and control, and thus collaboration and decisioning, inside and outside of the organization. Advancements in sensing, surveillance, search, and related `big data' technology have produced a renaissance in the meaning of the word "transparent," enabling a new generation of organizations in which broad access to real-time observation is the norm. Yet a foundational question about transparency remains unanswered: are there circumstances under which too much transparency might be detrimental to group performance? Put differently, are there circumstances under which privacy makes us productive?

I have three primary conclusions. The first is that transparency holds great promise for organizations, but to be effective, approaches for achieving transparency must extend beyond making environments more observable. Accurate observability is far more difficult to achieve than mere observability. For human beings, who are prone to changing behavior to regulate attention when either observed by others or observing others, increasing observability can have the result of reducing authenticity and thereby transparency, a result I call the Transparency Paradox. An organization that fails to design effective zones of privacy may therefore inadvertently undermine its capacity for transparency.

Second, the Transparency Paradox has been elusive not only because relatively few researchers have sought to rigorously study the performance implications of transparency, but also because those who have done so have used different methods, literatures, and even vocabularies. Transparency and privacy are interdependent opposites yet are studied separately. This dissertation is at least as integrative of existing, diffused literatures as it is built upon new empirical participant-observation, field experiment, and longitudinal survey findings.

My third finding follows from those two: a nuanced theory on transparency requires an appreciation for both the observation of activity and boundaries across which observation is limited. How such privacy boundaries are constructed, legitimized, and timed partially defines the level of transparency, and performance, an organization can achieve and are thus important, yet underutilized, managerial levers. Privacy can make groups productive.

Given increased competition with for-profit firms, the issue of the comparative advantage of non-profit organizations is renewed. While non-profits may want to differentiate themselves when faced with additional non-profit competition, it is unclear whether they would want to differentiate themselves or converge towards for-profit competitors. This paper addresses this issue by considering the different financing models, human resource systems, and objectives of non-profit organizations, as compared to for-profits, in the mixed industry of microfinance.

In my first essay, I utilize an analytical model, where firms can choose profit status, sources of financing, and the borrowers they target with a given interest rate and loan size. I find that non-profit and for-profit organizations will segment the market, partly due to differences in profit status and partly due to differences in the sources of financing. I find support for the hypotheses using a large-scale panel dataset of microfinance organizations in Latin America.

The second essay focuses on a particular element of the business model considered in the first essay: deposit-taking. I show that non-profits that begin taking deposits only benefit financially if they also begin making larger loans. This suggests that changes in non-profits' activities may require a change in positioning to improve financial performance. More broadly, it supports the literature on the importance of fit between product market strategy and business model, which suggests extra managerial attention be paid to whether and how to adopt activities that change the business model.

The third essay considers another key distinguishing element between the non-profit and for-profit business model: the incentive and reward systems for employees. I merge the panel dataset with a cross-sectional survey on the dimensions along which the firms incentivize employees, and develop a proxy for the level of bonus pay. The results suggest that more mission-oriented firms reward employees on more dimensions, but with lower average salary and a smaller amount of bonus pay. This suggests that incentive pay may be used as a signal in more mission-oriented firms to clarify the expectations of employee behavior, whereas it is used to directly motivate and incentivize employees in less mission-oriented firms.

The three essays of my dissertation combine to examine the characteristics that distinguish non-profit organizations, even in industries in which they co-exist with for-profits. The results shed light on these increasingly common mixed industries, as well as provide insight into business model competition and the fit between elements that make up a business model.

This dissertation consists of four chapters that propose a novel theoretical framework for understanding organizational creativity and innovation that I call dynamic problem solving. Previous scholars have proposed extensive theory to explain how people can develop novel and useful solutions to well-defined problems, but this overlooks many situations in which people must work on creativity and innovation projects before they have constructed a well-defined problem. One such situation is developing a breakthrough innovation, which is characterized by extreme levels of uncertainty and ambiguity throughout the development process. Most scholars argue that people should approach these situations by first defining a problem and then developing a solution—a process that I call deliberate problem solving. However, a small body of research suggests that people can take the opposite approach, in which they develop a solution first and then define a problem—a process that I call emergent problem solving. These processes seem to fundamentally conflict with each other, leaving open the question of how people engage in problem solving to develop a breakthrough innovation. I addressed this overarching research question by conducting a two-year ethnography of an organization that built one of the world’s first social robots for the home. I found that developers did not use one type of problem solving at the exclusion of the other, but instead dynamically shifted between them over time, thus engaging in dynamic problem solving. I develop theory for this process at both the individual and group levels of analysis.

While multiple literatures suggest that emotion shapes behavior and satisfaction in experiences, there has yet to be a concerted effort to explicitly consider human emotion – whether from customer or employee -- as a source of variability in operations management (Karmarkar, 2015; Dasu and Chase, 2013). Environmental emotions, those that are endemic to the service, or emotions stimulated by operational design choices may each exert influences on service outcomes that providers and scholars alike have yet to consider. As scholarly work to arrive at an agreed upon theoretical foundation for the study of service operations has continued, open empirical questions remain about 1) the magnitude and predictability of emotion’s influence on service outcomes, 2) the opportunity to affect emotional experience through service design and 3) the role that technology plays – particularly in self-service contexts (Berry et al, 2015).
This body of work uses both laboratory and field experimentation to understand the impacts of emotional sources of variability to operational performance and to investigate the potential for more empathic service design to improve customer engagement while preserving sought-after efficiencies. Across three investigations, set in the domains of financial services and ride-sharing, I show that anxiety, whether it is directly related to the decision at hand or not, is a source of variation that exerts a costly influence on choice satisfaction and decision-making that spills over to affect service relationships. I also find that these previously ignored effects can be mitigated through relatively low-cost service design choices.

This dissertation consists of three papers that analytically and empirically explore how to better engage firms and supply chains in environmental sustainability initiatives. Together, these papers contribute to the understanding of mechanisms and choices associated with the adoption of environmental initiatives, and to the understating of how environmental information acquisition and sharing affects decisions to adopt environmental initiatives.

In the first paper, Energy Efficiency: Picking Up the Twenty-Dollar Bill, we employ a game-theoretic model to analyze organizational barriers to adopting capital energy efficiency initiatives. We find that operating managers under-propose energy efficiency projects because the lack of expertise in energy efficiency increases project due diligence costs, causing such projects to be under-adopted by senior management compared to other capital projects yielding comparable economic benefits. We also find that firm-level environmental goals and partnerships with technology providers are more effective than subsidies in increasing the adoption of energy efficiency projects because they directly address managers' reluctance to propose such projects.

In the second paper, Engaging Supply Chains in Climate Change, we theorize and hypothesize on several factors that motivate suppliers to share climate change information with buyers when buyers request it. We test our hypotheses using data from the Carbon Disclosure Project's Supply Chain Program. We find evidence that suppliers are more likely to share this information when requests from buyers are more prevalent, when buyers appear committed to using the information, when suppliers belong to more profitable industries, and when suppliers are located in countries with greenhouse gas regulations.

In the third paper, The Supply Chain Impact of Environmental Labeling Decisions, we use analytical models to analyze two questions retailers face when contemplating the adoption of environmental labels: (1) Should the retailer choose an information label or a seal of approval label, and (2) Does the environmental performance of the product depend on the party in the supply chain making this decision? We find that the suitable label type depends on demand uncertainty, consumer perception, and costs to obtain labels. Also, in the majority of realistic scenarios, the retailer prefers a higher environmental performance level than the supplier.

This dissertation explores the activities entrepreneurs undertake when launching ventures and innovating in new or nascent industries. Actors in nascent industries can play a vital role in shaping the future. Yet the features of a nascent context can also lead to failures. I describe three empirical studies that involved significant time in the field studying the development of ventures in two contemporary nascent industries: the smart city industry and the air taxi industry. In each study, I draw on several theoretical lenses, integrating perspectives from psychology, behavioral strategy, and institutional entrepreneurship to build new, grounded theory on the processes that underlie entrepreneurship and innovation in nascent industries. The key insight of this dissertation is that, because of the extreme ambiguity that characterizes the context, entrepreneurship in nascent industries represents a unique - and uniquely challenging - balancing act. I propose that, in nascent industries, the way that entrepreneurs think, feel, and interact in the face of profound ambiguity can shape the success or failure of their ventures. This dissertation aspires to make contributions to two literatures. By focusing on internal firm processes that affect success, I contribute to a new, and rapidly evolving, research conversation on entrepreneurship in nascent industries. By uncovering the importance of previously-unidentified cognitive and emotional patterns and mechanisms in driving firm performance, I contribute to the growing stream of research in behavioral strategy.

This dissertation comprises of two essays on the accounting rules and regulations. The first essay explores the accounting rules for bank loan loss recognition. Motivated by the FASB's new proposal that introduces an expected loss methodology for recognizing losses, it examines two questions that are related to the current GAAP and the new accounting rule. It develops an empirical model of loan loss prediction from the machine learning literature, and shows that it outperforms current GAAP. It then demonstrates the value of expanding the inputs to the model, as proposed by the new rule. Finally, it examines the drivers of the performance difference between the developed model and the current GAAP. The second essay studies the regulation around shareholder activism and the proposals that they submit for firms. In particular, it considers the proposals that managers seek to exclude from the proxy statement. Using a hand-collected data set of SEC ``no-action'' letters, it documents that the shareholder proposal mechanism has a broader set of components than that considered by prior research, and provides a number of empirical regularities. It further documents that shareholder proposals are part of a larger mosaic of shareholder intervention in companies that often go together.