Business & Entrepreneurship

With trade barriers decreasing and outsourcing becoming a common practice even for white-collar workers, every business—no matter the size – has been affected by globalization. It doesn’t take a genius to realize that American companies have to react intelligently to this reality, but instead of trying to respond on their own, many companies are turning to experts and researchers in the field

Good team work means not trusting each other too much.There’s no denying that trust is essential in a healthy work place. It’s expected that you trust your co-workers and your boss. And you hope that your boss and peers trust you. Common wisdom is that trust brings numerous benefits: it improves communication, raises group performance, reduces conflict, and provides greater job satisfaction. However, a recent study by a professor at the Olin School of Business at Washington University in St. Louis found that too much trust could actually be bad for business…when it comes to working on team projects.

Stock options or pure stock — what’s the trade-off?In recent years, the practice of motivating CEOs and managers with stock options rather than pure stock has been linked to corruption and fraud. But companies shouldn’t fear the option, according to two professors in the Olin School of Business at Washington University in St. Louis. Moving away from stock options as a way to reward good work may be a bad business move. The professors argue that in most cases stock options provide better incentives to motivate employees and they’re less expensive for the company to issue. At the same time, the researchers found that if a company is just starting out or facing possible bankruptcy, then stocks are your best bet.

Eliminating the need to ascertain eligibility.Years of double-digit increases in health care costs are devastating business, federal, state and family budgets. While the United States pays more per capita for health care than any other industrialized country, 44 million people lack assured care. “Most people overlook the most affordable way to achieve universal coverage – putting all of us under the Medicare umbrella,” says Merton C. Bernstein, a founding member of the National Academy of Social Insurance and the Coles Professor of Law Emeritus at Washington University in St. Louis. “That single-payer system would reduce non-benefit spending by doctors, hospitals, clinics, laboratories and health care insurers by about $300 billion a year, providing funds to insure everyone without additional outlays.”

It’s tax-time. For many people that means handing some hard-earned money over to Uncle Sam. But for others tax time is refund time. Theoretically, that refund is money you’ve earned as a part of your salary, and should be accounted for and spent like regular income. However, most people view it as “found money” and generally find a way to justify spending it on something they didn’t necessarily need. According to a professor of marketing at the Olin School of Business, people mentally credit their refunds to specific budgetary accounts to justify spending it on desirable luxuries. The result is people end up spending too much, making it harder to pay other, more essential accounts.

With the latest news that Hewlett Packard has dubbed Mark Hurd as its new CEO, I wanted to make you aware of the expertise Professor Todd Zenger, the Robert and Barbara Frick Professor of Business Strategy at Washington University in St. Louis, has on Hewlett Packard’s success and failures over the years. Zenger has had […]

When both husband and wife hold college degrees, it is the husband’s degree — and the husband’s degree alone — that typically determines whether a “power couple” will move to another city for career purposes, suggests a new study by economists at Washington University in St. Louis. The study is bad news for young women seeking gender equity in salary and career opportunities.

There are times when bending over backwards to make customers happy won’t result in better profits; in fact, it could cause a drop in profits. Unprofitable customers show up in every industry, causing companies to reconsider the value of customer service and to even consider “firing” those customers that cause the most loss.

When a company decides to turn to a call center to handle its customer service, company heads assume that signing a contract is the best way to get the best service. Not necessarily, says Tava Olsen, associate professor of operations and manufacturing management in the Olin School of Business at Washington University in St. Louis. Olsen and a colleague at the University of Toronto, found that some contracts allow call centers to meet their obligations half-way, leaving their clients — and their client’s clients — on hold.

Carl Schramm, President and CEO of the Kauffman Foundation, will deliver an address entitled: “Innovation: How it will impact the United States in a Global Economy” on Friday, Feb. 18, 2005.