Working Harder, Amazon Wages, and More – Boston News
Let’s explore some of the most interesting stories that have emerged from Boston business schools this week.
Knowing What Your Boss Earns Can Make You Work Harder – Harvard Business Week
In new research co-authored by HBS’s Zoë B. Cullen and UCLA’s Ricardo Perez-Truglia, it was discovered that “knowledge of managerial compensation seemed to coax more effort out of workers, [but] the exact opposite [is true] when employees learned what peers were making.”
“How Much Does Your Boss Make? The Effects of Salary Comparisons” finds that “these externalities can have important implications for the provision of incentives within the firm and for pay transparency.”
According to the Harvard Business Week article, the paper could have significant ramifications in terms of how companies “rethink the equity of their own compensation plans and the level of salary transparency they wish to maintain.”
You can read the full HBW article here.
What’s Behind Amazon’s Wage Hike? – MIT Sloan Newsroom
At a moment where Amazon has received intense criticism of its “labor practices and low wages” exemplified by Senator Bernie Sanders’ Stop BEZOS Act, the e-commerce behemoth recently announced that its minimum wage for all U.S. employees will be $15 per hour, effective November 1.
MIT Sloan Associate Professor of Operations Management and Good Jobs Institute founder Zeynep Ton explains the political strategy behind Amazon’s decision.
In addition to Amazon’s desire to position itself as a “worker-friendly company,” Ton explains, “a lot of retailers are finding it difficult to attract people, especially going into the holiday season. [Outlets like] Macy’s and Target are looking to hire tens of thousands, and it’s going to be harder for them now. They’ll have to up their game, not just for the holidays but in general.”
Amazon Founder, Chairman, and Chief Executive Officer Jeff Bezos, the world’s richest man, has become part of the focus on Amazon’s questionable business practices in recent years.
Ton adds, “The investors are very different, and their tolerance for low profitability is much lower for general retailers than for Amazon. It’ll be challenging for other companies, and I hope they start to look for ways to make their people central to their success.”
You can read more about the move from Amazon here.
Why Aren’t Companies Getting Better At Breakthrough Innovation? – Babson Thought & Action
For their new book, Beyond the Champion: Institutionalizing Innovation Through People, Babson College F.W. Olin Graduate School of Business professors Gina Colarelli O’Connor, Andrew Corbett, and Lois Peters posit that “looking to grow and succeed, getting better at innovation is a constant, nagging, and critically important challenge.” Beyond the Champion offers a blueprint for organizational change.
In an excerpt from the book, the authors write:
“Strategic innovation is a “team sport”: it’s so big that no one person has the skill set to do it all. Individuals want defined roles that allow them to take advantage of their innovative strengths—roles that give them some autonomy while still providing guidance for where they should invest their energies. The passion model is great, but it’s not enough in a large, established company.”
You can read the full Babson Thought & Action article here.
Regulating Tech, Migrant Workers, and More – Boston News
Let’s explore some of the most interesting stories that have emerged from Boston business schools this week.
Will Regulating Big Tech Stifle Innovation? – MIT Sloan Newsroom
The MIT Sloan Newsroom talked to Sloan Economist John Van Reenen and Professor Emeritus Richard Schmalensee about the difficulties of regulating the titans of tech now that they have grown to “dwarf the rest of the U.S. economy in recent years.”
“You see this concentration of mega-firms across lots of sectors, like retail and logistics … and that raises issues about ‘Is this leading to a reduction in competition?’ You’re trying to protect consumers by regulating, but then you can end up taxing innovation.”
Schmalensee explains that regulations could take aim at “antitrust policy around mergers and acquisitions.”
“A lot of people have argued for being tougher on acquisitions. It’s not an extension of U.S. antitrust law or policy for that matter, to say ‘You really ought to be a little more skeptical of mergers, even with small companies, when they might grow into big competitors or have technology that can be used to make it difficult for others to compete.’”
You can read more from Van Reenen and Schmalensee here.
Reel Life Learning – Sawyer Business School Blog
The Sawyer Business School Blog recently profiled Sam Slater (MPA ’16), whose double life as an independent film producer collided halfway through his degree when he signed a five-film studio deal, beginning with the recent Mile 22, starring Mark Wahlberg, Ronda Rousey, John Malkovich, and Indonesian action firebomb Iko Uwais.
Slater explains he didn’t think twice about putting his MPA on hold.
Slater and Regina Hall on the set of Support the Girls / Photo via suffolk.edu
“Stopping the MPA just didn’t seem like the logical thing to do when there were so many accommodations being made to help me finish. Plus, I like politics. I like what goes on locally. I want to be involved. I genuinely wanted to finish the degree,” he says.
You can read the rest of the interview with the Sawyer Business School here.
Is the U.S. Losing its Ability to Attract Highly-Skilled Migrant Workers? – Harvard Business School Working Knowledge
Martha Lagace spoke with HBS Professor of Business Administration Bill Kerr about his recently released book, The Gift of Global Talent: How Migration Shapes Business, Economy and Society, which explores the “benefits and pain points of high-skilled migration.”
Kerr explains that he wanted to “uncover how this part of our business, economic, and social landscape operates and to argue, hopefully in an accessible format, for ways to make this process better.”
“The book brings to the surface both who really obtains the gift of global talent—who benefits the most from this gift—and also who does not benefit or gets hurt. I worry about the gift of global talent becoming less and less and less for the US.”
He adds, “Globally about half of skilled migrants are female. Countries and firms that want to benefit from global talent need to be able to welcome women. We explore why global talent flows matter so much, from superstar scientists to white-collar workers. There are many parts worthy of celebration, but also many parts to critique.”
Read the full article here.
What are the Most Successful MBA Startups of 2018?
Earlier this month, LinkedIn released its 2018 list for the Top Startups in the U.S. The list includes 50 of the newest successful startups in the U.S. Most specifically, the list analyzes young companies that are experiencing exceptional employee growth, increasing interest, member engagement, and talent. The social media platform used its network of 575 million members to see which startups commanded the most attention and had the most top talent. To be eligible, startups need to be less than seven years old, have at least 50 employees, and be privately held and headquartered in the U.S.
We decided to take a look at the list and see which of these year’s startups were founded by an MBA. This list is by no means exhaustive, but quickly we were able to find founders and CEOs with MBAs from top universities such as USC Marshall, Wharton, Harvard Business School, and Columbia Business School. Continue reading…
Kyrie Irving Hits The Books at Harvard Business School
On Monday, Boston Celtics All-Star Kyrie Irving attended the first day of a class called “Crossover Into Business” at Harvard Business School.
Irving—a five-time All-Star, former World Champion, and part-time actor—is one of several professional athletes enrolled in a semester-long program taught by HBS professor Anita Elberse, specially designed to help professional athletes develop their business acumen by working with HBS MBA student mentors. Some of the stars of HBS’s autograph-worthy cohort include Detroit Pistons center Zaza Pachulia, former All-Star Chris Bosh, and Brooklyn Nets breakout point guard Spencer Dinwiddie.
Earlier this summer, as he was recovering from an injury, Irving was expressing interest in attending a professional business course, similar to many of his aforementioned fellow NBA players.
“When I am playing basketball or perfecting my craft, which comes with a lot of sacrifice, then the time that I’ve got outside of it, I’ll use to develop a lot of interests and passions that I have, to make up for that,” he told Boston.com. “I feel like if I had the same amount of time that I was afforded [for basketball] to learn about business and investments, I think I’d probably be in a pretty different place.”
In a field where intense drive and dedication are integral for success, it may come as no surprise that many professional athletes make the seamless transition to accomplished entrepreneurs after they hang up their uniforms.
Venturing into the business world may even be a necessity for some athletes, as professional careers are often lucrative and short. Pro football players, for instance, can earn tens of millions of dollars in their career but the average career only lasts six years.
So, what do you do with tens of millions of dollars and extra time on your hands? You invest.
Many universities have developed programs that cater to current and former athletes to learn how best to manage their earnings.
The University of Miami Business School offers an 18-month Executive MBA program for Artists and Athletes, specifically scheduled around the NFL season. Founded in February 2015, the inaugural class had 43 students—most of which were current or former NFL athletes. Many of these athletes come familiar with many aspects of business, from branding and marketing to media and public relations. These programs provide the framework to help athletes transfer these skills into the business world, leveraging their personal brand and networks to elevate their careers.
Business skills become a necessity as many former athletes face financial challenges. According to a paper released by the National Bureau of Economic Research in April 2015, 16 percent of NFL players file for bankruptcy within 12 years. Current Carolina Panthers wide receiver Torrey Smith famously said, “When football is done, some guys are lost. Most people have never seen this type of money. They don’t come from families that have money or understand money … you can get into a hole real fast.”
Niche MBA programs are popping up across the country to address this growing need. In addition to the University of Miami EMBA, there are also similar programs at George Washington University and Indiana University.
In 2017, Smith graduated from University of Miami’s Executive MBA program, which he attended with his wife, Chanel. The couple used the skills and knowledge gained from this program to inform the work of their charitable foundation, the Torrey Smith Family Fund.
The Smith Family Fund serves young people in the Baltimore area. NFL players all around have flocked to this program compared to other niche programs in the country, as it has been carefully tailored to fit their schedule, interests, and needs. The University of Miami is aware that not all students can learn successfully online, while other students haven’t set foot in a classroom in over a decade.
Along with a rigorous curriculum, Miami hires professional trainers to work with current players at 6:30 a.m. before class, and tutors to work with the players at night from 7:30-10:30 p.m.
You can learn more about the University of Miami Business School program here.
Applications Down 4.5 Percent at HBS, But Applicant Quality Remains High
The release of the Harvard Business School (HBS) Class of 2020 profile statistics last week revealed that the Boston school—like many of its U.S. peers—saw a decrease in overall application volume, but median GMAT score and GPA remained unchanged from the prior year at 730 and 3.71 respectively. The admit rate, 11 percent, was also unchanged year over year. So though he was working from a smaller pool of 9,886 applicants (down from 10,351 last year), Managing Director of Admissions and Financial Aid Chad Losee did not sacrifice on quality.
Harvard Business School Application Slips for Class of 2020
HBS is one of many leading U.S. business schools to see application volume drop off in this most recent application cycle. A strong economy paired with concerns among international applicants about potential student and work visa challenges made for even more dramatic declines at schools like UNC Kenan-Flagler and Georgetown’s McDonough School, which reported double-digit drops of 18.3 and 16.2 percent respectively. Yield at HBS–which is to say the percentage of admitted students who chose to enroll–slipped from 91 to 90 percent. Still, HBS remains far and away the leader in this statistic.
Applications are down 4.5 percent at HBS, but declines across other U.S. MBA programs was much more apparent.
At HBS, the 4.5 percent application volume decline was spread between both international and domestic applicants. International students make up slightly more of the HBS class this year, 37 percent compared to 35 percent last year. They hail from 69 countries as compared to 70 for the Class of 2019.
Another interesting development is the increase in GRE takers among admitted students. A record-setting 15 percent of the incoming class got there on the strength of their GRE scores, up from 12 percent last year. It’s only in the past couple of years that schools have begun to disclose the percentages of students who submit GRE scores in lieu of GMAT scores, which used to be the gold standard. But at HBS and elsewhere, a growing number of applicants seem to be taking schools at their word that they are indeed test agnostic.
There were not a lot of major shifts elsewhere in the statistics for the newest HBS class. The percentage of women is down by one point, slipping from 42 to 41 percent. U.S. ethnic minorities remained constant year over year at 26 percent of the class. The average age also remains unchanged at 27.
Applicants from Private Equity, Tech, Increase
In terms of prior work experience, there were again few shifts from the prior year. Slightly more students came in from private equity/venture capital (16 percent, compared to 15 percent last year), tech (also 16 percent, up from 15), and government/non-profit (7 to 8 percent). These upticks correlate with small declines in students from industrial/heavy manufacturing and other services. Military veterans make up 5 percent of the Class of 2020, on par with the Class of 2019.
And in terms of what students in this year’s entering class studied as undergraduates, again HBS showed little fluctuation. Economics/business majors make up the largest portion—46 percent, up from 45 percent last year. STEM undergrads also increased one percentage point, from 36 to 37 percent. Humanities/social science undergraduates made up just 17 percent of the class, down from 19 percent last year.
To view HBS’s complete Class of 2020 profile, click here.
This article has been edited and republished with permissions from our sister site, Clear Admit.
Alumni Spotlight: Ray Dalio, Bridgewater Associates Founder, HBS MBA
For 40 years, investment firm Bridgewater Associates has managed portfolios and partnerships with a tremendous level of success. Today, the company manages about $160 billion for approximately 350 global clients, including public and corporate pension funds, university endowments, charitable foundations, supranational agencies, sovereign wealth funds, and central banks. Ray Dalio, Founder of Bridgewater Associates and Harvard Business School MBA grad, is a big reason for this success. Continue reading…
