84 Posts found for Source: Capital Ideas

Entrepreneurs often believe their new product or service is so exceptional that their customers will seek them out to acquire it. And like most people, entrepreneurs are uncomfortable with ambiguity, and selling involves a lot of it.

Instead of selling, entrepreneurs turn their energies to every other aspect of running their new companies. They conduct surveys, design prototypes, and tinker with their products until they … [ Read more ]

Content: Quotation | Author: Robin Mordfin | Source: Capital Ideas | Subjects: Entrepreneurship, Marketing / Sales

Subjective evaluation by supervisors can address the shortcomings of numeric measures. When numeric measures focus employees on one goal, a second, subjective bonus can make employees pay more attention to other objectives that may be difficult to quantify, like managing controllable risks. If a plant manager’s bonus depends on profits alone, he might postpone maintaining equipment. A supervisor can motivate the plant manager to consider … [ Read more ]

Content: Quotation | Authors: Hal Weitzman, Michael Gibbs, Vanessa Sumo | Source: Capital Ideas | Subjects: Human Resources, Management, Organizational Behavior

In 1970, in “Efficient Capital Markets: a Review of Theory and Empirical Work,” Gene Fama defined a market to be “informationally efficient” if prices at each moment incorporate all available information about future values. Informational efficiency is a natural consequence of competition, relatively free entry, and low costs of information. If there is a signal, not incorporated in market prices, that future values will be … [ Read more ]

Content: Quotation | Author: John H. Cochrane | Source: Capital Ideas | Subjects: Economics, Finance

The uniform, constant, and uninterrupted effort of every man to better his condition, the principle from which public and national, as well as private opulence is originally derived, is frequently powerful enough to maintain the natural progress of things towards improvement, in spite both of the extravagance of government, and of the greatest errors of administration.

Content: Quotation | Author: Adam Smith | Source: Capital Ideas | Subjects: Capitalism, Economics, Government

The statesman, who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would be nowhere so dangerous as in the hands of a man who … [ Read more ]

Content: Quotation | Author: Adam Smith | Source: Capital Ideas | Subjects: Capitalism, Economics

One oft-cited source of productivity is learning by doing, which is the ability of workers to raise productivity through experience. In fact, economists have credited the Horndal effect to learning by doing. The longer workers do the same type of job the better they get. The result is higher production without having to put in new machines or hire more workers.

Several studies have looked into … [ Read more ]

Content: Article | Source: Capital Ideas | Subjects: Economics, Operations

In the contentious and at-times maddening public discussion about American women and their happiness, anecdotal evidence is abundant, particularly from and about superwomen who have had children and achieved high levels of professional success. But one thing is often missing: data. Marianne Bertrand has set out to correct this, replacing anecdotes with numbers, helping make possible a more data-driven, evidence-based discussion.

Content: Article | Authors: Emily Lambert, Marianne Bertrand | Source: Capital Ideas | Subject: Women in Business

For all the talk about creating better incentive plans for employees, many proposed ideas are still off the mark. One reason is that managers tend to ignore insights from academic research, while academics do not always focus on practical applications. Chicago Booth Clinical Professor Michael J. Gibbs offers insights that bridge academic and practical perspectives.

Content: Article | Authors: Michael Gibbs, Vanessa Sumo | Source: Capital Ideas | Subjects: Human Resources, Management, Organizational Behavior

Steven Neil Kaplan, Neubauer Family Distinguished Service Professor of Entrepreneurship and Finance at Chicago Booth, is making a sometimes–unpopular but data–driven case in defense of high–earning CEOs. Kaplan has written a string of papers challenging the common views that executive pay isn’t tied to performance, that boards rarely punish underperforming CEOs, and that average CEO pay keeps going up.

Instead, he argues, the market for … [ Read more ]

Content: Article | Authors: Hal Weitzman, Vanessa Sumo | Source: Capital Ideas | Subject: Corporate Governance

We have become much more productive—output per hour worked increased more than fourfold between 1950 and 2012, according to the Bureau of Labor Statistics. But the amount we work hasn’t fallen anywhere near as fast. In the United States, the average working year went from 1,963 hours in 1950 to 1,790 hours last year, a drop of less than 10%.

This has prompted some people to … [ Read more ]

Content: Article | Author: Dave Nussbaum | Source: Capital Ideas | Subjects: Economics, Organizational Behavior

Here are some sobering statistics for entrepreneurs. In 2011, more than 400,000 new business entities were launched in the United States, but 34% of those companies are now out of business. Two years from now, less than half will still be around. By 2018 only 30% will have survived.

What’s behind these failure rates? In many cases it’s a lack of salesmanship, says Waverly Deutsch, clinical … [ Read more ]

Content: Article | Author: Robin Mordfin | Source: Capital Ideas | Subjects: Entrepreneurship, Marketing / Sales

Subjective evaluation by supervisors can address the shortcomings of numeric measures. When numeric measures focus employees on one goal, a second, subjective bonus can make employees pay more attention to other objectives that may be difficult to quantify, like managing controllable risks.

Content: Article | Authors: Hal Weitzman, Vanessa Sumo | Source: Capital Ideas | Subjects: Human Resources, Management, Organizational Behavior

An interesting essay by finance luminary Eugene F. Fama, which touches on some of the important events in the evolution of the finance field.

Content: Article | Author: Eugene F. Fama | Source: Capital Ideas | Subjects: Finance, History

Just how accurately do people understand each other? For many years, psychologists like me have been trying to answer this question by putting mind reading to the test. We might, for instance, ask a group of people to tell us how much they like you, then ask you to predict how much each of these people will report liking you, and then compare your predictions … [ Read more ]

Content: Article | Author: Nicholas Epley | Source: Capital Ideas | Subjects: Organizational Behavior, Personal Development

It pays for a company to keep its word. Research suggests that companies with strong corporate culture have higher long-term returns.

Editor’s Note: I didn’t find the research, at least as portrayed in the article, to be too convincing, but the topic and concept are interesting and worth considering.

Content: Article | Authors: Luigi Zingales, Robin Mordfin | Source: Capital Ideas | Subjects: Management, Organizational Behavior

In 1970, in “Efficient Capital Markets: a Review of Theory and Empirical Work,” Gene Fama defined a market to be “informationally efficient” if prices at each moment incorporate all available information about future values. Informational efficiency is a natural consequence of competition, relatively free entry, and low costs of information. If there is a signal, not incorporated in market prices, that future values will be … [ Read more ]

Content: Article | Author: John H. Cochrane | Source: Capital Ideas | Subjects: Economics, Finance

There is no shortage of money managers who claim they can beat market benchmarks, some with impressive track records. And one stream of research suggests that some people can identify and profit from mispriced securities in the stock market. Chicago Booth Professor Lubos Pastor believes that money managers are not only skilled, but becoming ever more skilled over time. So should you dump your index … [ Read more ]

Content: Article | Author: Ronald Fink | Source: Capital Ideas | Subjects: Economics, Finance

Late Chicago Booth Professor (and Nobel Laureate) George Stigler pioneered the concept of regulatory capture. In simple words, regulatory capture exists when a regulatory agency, created to act in the public interest, ends up advancing interests of the industry it is charged with regulating. Since Stigler, when economists talk about regulatory capture, they do not imply that regulators are corrupt or lack integrity. In fact, … [ Read more ]

Content: Article | Author: Luigi Zingales | Source: Capital Ideas | Subject: Economics

The globalization of trade is so established that it has lost the power to astound us. Yet the global economy is not as integrated or efficient as is widely believed, according to A. Kerem Cosar, assistant professor of economics at Chicago Booth, because getting goods from their point of origin to international shipping centers within the same country can be expensive—sometimes more expensive than shipping … [ Read more ]

Content: Article | Author: Samantha Stainburn | Source: Capital Ideas | Subjects: Economics, International

Michael Gibbs and his co-researchers—Susanne Neckermann and Christoph Siemroth—analyzed the progression of 5,000 ideas at a large IT firm and identified a few operational decisions that collectively paid off more than tenfold. Their findings, especially when coupled with those of their colleagues in academia and industry, contain four approaches companies can use to spur innovation.

Content: Article | Source: Capital Ideas | Subject: Innovation