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The Takeaways:
MIT Sloan Faculty Members Offer Their Perspectives

Our faculty members generate distinctive and celebrated research that analyzes today’s business challenges and develops transformative solutions and insights. Collected here are perspectives from faculty members pulled from various media sources.

Zeynep TonZeynep Ton

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Andy Yap on how space can alter behavior... “Our bodies are perpetually constrained by our physical spaces. When these spaces are large, we incidentally adopt expansive postures. Such postures—open, widespread limbs that fill the space up—often project high power. Contractive, closed postures—in which limbs are pulled in close to the torso and the body collapses inward to minimize space—tend to project low power. It’s not having something big that makes you feel more powerful; these spaces allow you to have an expansive posture, and that’s what makes you feel more powerful. And the feelings of power are what alter your behavior.”
Big Chairs Create Big Cheats,” Harvard Business Review, November 1, 2013 Andy Yap is a lecturer.

Zeynep Ton on the good jobs strategy... “These companies think about employees not as costs to minimize but as capable human beings with the potential to generate sales and profits.”
Higher Wages Are Good For Companies Too,” The Nation, December 4, 2013 Zeynep Ton is Adjunct Associate Professor of Operations Management

Catherine TuckerCatherine Tucker



The Challenges of Using Social Media for Marketing Purposes
Catherine Tucker
The Chicago Tribune, December 13, 2013

In an era when marketers spend billions on managing social media, is that investment worthwhile? Should firms actively guide, promote, and shape online conversations, or leave them to grow organically?

To investigate this, my colleague Amalia Miller from the University of Virginia and I recently studied what happens when hospitals started to actively manage their profiles on Facebook. We focused on Facebook because it’s the most visited media site in the U.S., accounting for 20 percent of all time spent on the Internet. We also chose it because the Facebook Places initiative created a page for every single hospital in the U.S., allowing organizations to choose whether to actively manage their pages or not.

We selected hospitals for two reasons. First, they are so regulated that we have far better data on them than for most other organizations in the U.S. economy. Second, there have been a lot of questions about whether it is wise for healthcare organizations to step into social media, both from a patient privacy perspective and from a cost-benefit perspective.

We found that when hospitals started managing their Facebook pages, they began to receive a lot more likes, visits, and comments—from their employees, not their customers. Conversations involving patients actually decreased.

This may have been because the posts were not, on the whole, clientfocused. They tended to highlight things of interest to employees, like recent organizational achievements and events. Client-focused posts only made up around one-fourth of all posts. However, in the rare instances when a hospital did focus on clients in posts, client engagement did increase.

So when you’re thinking of whether to manage your social media presence actively, think carefully about your goals. If you want to encourage internal dialogue with employees, motivate them, and improve communication flows, active management may be the way to go; but if so, human resources should be in charge of it, not marketing or sales.

Our findings apply to sectors where the product is not naturally a “social product,” meaning that—unlike movies or books—it isn’t naturally something people chatter about online. For more sensitive areas like healthcare, those conversations tend to be very fragile and consequently easy to suppress.

Catherine Tucker is the Mark Hyman, Jr. Career Development Professor and Associate Professor of Marketing.

Sinan Aral on social influence... “People are more skeptical of negative social influence. They’re more likely to ‘correct’ a negative vote and give it a positive vote.” Aral warns, “These positive ratings also represent bias and inflation. The housing bubble was a spread of positivity, but when it burst, some people lost their savings.
...Stock bubbles represent a positive herding, and they can be dramatically bad in the wrong context.”
Online Groupthink: How others’ ratings affect your judgment,” MIT Technology Review, October 22, 2013

Jared CurhanJared Curhan

Jared Curhan on bargaining a better deal... “If you’re sweating, and your heart rate is up, it’s seen as a sign something is going wrong, that you’re too nervous, off-balance, flustered,” he said. “Whereas we’re showing that something could be very right.”
Work Up a Sweat, and Bargain Better,” The New York Times, November 9, 2013
Jared Curhan is the Sloan Distinguished Associate Professor of Organization Studies.

Heeding contagion—preventing another economic crisis

Kristin Forbes and Roberto Rigobon
MIT Sloan Executive Education Blog, November 19, 2013

The U.S. is unflinching in its optimism and ability to move forward after a crisis, such as the 2008 recession. And yet the drawback to this reflex is the ability to quickly forget what landed us in the situation to begin with. As our economy recovers, we potentially risk a growing complacency and inadequate financial oversight.

Just months ago, the country of Cyprus made global headlines as their banks’ ballooning assets grew far beyond what the country could support. Losing over 4.5 billion euros, the Cyprian banks tried to repair the damage by confiscating secure deposits, affecting the assets and the trust of investors throughout Europe and Russia and causing a ripple effect of investment withdrawals. The contagious effects of this crisis are a warning of how interconnected we are, and how one failed system could halt economic recovery elsewhere.

Contagion is Real

MIT Sloan professors and economic experts Kristin Forbes and Roberto Rigobon have proven in their collective work that learning how financial shock in one country permeates the economic stratosphere of another can ultimately teach global financial institutions to communicate and collaborate to prevent a future crisis.

“You cannot entirely prevent another crisis, but you can prevent a crisis from spiraling out of control by learning from our past failures,” says Forbes, “and by setting up a system to monitor economic stress while ensuring that countries are working together rather than defensively isolating.”

Kristin Forbes is the Jerome and Dorothy Lemelson Professor of Management and Professor of Global Economics and Management.

Roberto Rigobon is the Society of Sloan Fellows Professor of Management and Professor of Applied Economics.

Duncan SimesterDuncan Simester

Duncan Simester on addressing fake online reviews... “One explanation for the data is that loyal customers may be acting as self-appointed brand managers. ... An alternative explanation is that the deceptive reviews are contributed by reviewers who seek to enhance their perceived social status.”
Fake Online Reviews Face Court Cases and Big Fines,” The Japan Times (AFP), September 30, 2013 Duncan Simester is the Nanyang Technological University Professor of Marketing.

Paul Osterman on the engineering skills gap... “[The skills gap] is nowhere near as universal or widespread as we keep hearing it is. But I don’t think the message of our work is that everything is fine.”
MIT Study Finds Engineering Skills Gap May Hurt American Innovation,” Forbes, November 12, 2013 Paul Osterman is the Nanyang Technological University Professor of Human Resources and Management and the Co-Director of the MIT Sloan Institute for Work and Employment Research

Andrew Lo on financing cancer research... “The funding in biomedicine is declining at the worst possible time, at the time that we are just at the point of making a significant set of transformative breakthroughs.” Lo says, “Instead of declaring war on cancer, what we really ought to be doing is putting a price tag on its head.”
Can Financial Engineering Cure Cancer?Advisor Perspectives, October 29, 2013
Andrew Lo is the Charles E. and Susan T. Harris Professor, Professor of Finance, and Director of the Laboratory for Financial Engineering

Matthew MarxMatthew Marx

Matthew Marx on the next generation of entrepreneurs... “If people hadn’t left Xerox and gone off and done their own things, we’d all be using dot-matrix printers today.” Cambridge Firm is Fertile Ground for Entrepreneurs,” The Boston Globe, September 23, 2013 Matthew Marx is the Mitsui Career Development Professor and Assistant Professor of Technological Innovation, Entrepreneurship, and Strategic Management.

Does the return of manufacturing to the U.S. mean more jobs?

David Simchi-Levi
MIT Sloan Executive Education Blog, November 24, 2013

The return of manufacturing to the U.S., also referred to as the “repatriation” or “re-shoring” by American and non-American companies alike, on the surface sounds like good news for employment. However, this is not necessarily the case.

According to research by MIT Sloan Professor David Simchi-Levi, there are a few reasons.

  1. The rise in the use of technology as well as plant automation and robotics in manufacturing facilities. More technology and robots means fewer human workers.
  2. The types of jobs required for these new, more modern plants are different than jobs needed a generation or two ago. For example, the highly automated manufacturing facilities of today require different types of talent in their employment pool. Today’s plants need more engineers who can fix the robots and less lower-skilled employees who would otherwise do the work that is now automated.
  3. In cases where manufacturing plants do require more employees, and hence could boost employment here in the U.S., many people coming out of school are simply not prepared to work in the field of manufacturing. Some might say manufacturing is not in our “mindset.” So, while some manufacturing companies are hiring, the employment pool does not meet the company’s needs—which means no lift in employment.

The bottom line is that the return of manufacturing jobs to the U.S. is still a positive development. Although employment might not rise drastically as a result of this shift, there will be a need for workers in these modern plants. And, American workers can once again look to the manufacturing industry for unique employment opportunities—a notion that a couple of decades ago didn’t seem possible.

David Simchi-Levi is Professor of Engineering Systems and Co-Director of Leaders for Global Operations.