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Bigly: the effect of Trump's rhetoric on national security

Going against the findings of his own intelligence community, President Donald Trump has called Russian meddling into the 2016 U.S. presidential election a “hoax.” In a recent turn of events, though, the president accused China of interfering with the midterm elections. Has President Trump’s rhetoric on the intelligence community and hesitancy to hold Russia accountable influenced countries, such as China, to also try meddling in U.S. elections? “If people and foreign officials start believing President Trump’s rhetoric, there is a possibility, that we will face issues of doubt and trust concerning U.S. policy and commitments,” said Craig Albert, an expert in U.S.-Russian security affairs, director of the master of arts in intelligence and security studies and associate professor of political science at Katherine Reese Pamplin College of Arts, Humanities and Social Sciences at Augusta University. “Also, President Trump’s rhetoric helps prop up Vladimir Putin as being equal in stature to the leader of the free world and gives Kremlin and Putin greater credibility with Russian citizens and the near abroad.” Midterm elections are on the horizon, and Putin will continue election meddling regardless of Trump’s actions or rhetoric, Albert said. “Russia, under Putin’s leadership, will continue to increase its cyber activity against all sectors of the U.S., including and especially into the cognitive hacking of our electoral process,” he said. Cognitive hacking is when fake sources are used to spread fake news on social media. The success of Russia’s meddling in the 2016 election is emboldening other actors, like China. “Non-state actors like ISIS and Al Qaeda feel empowered to engage in both cognitive and source hacking in order to shift American public opinion,” Albert said. “We already believe China and Iran have engaged in similar operations. It won’t be long before ISIS utilizes the same type of intelligence operations because they are low risk, extremely high reward operations. Albert is available to discuss: • How President Trump’s rhetoric affects the U.S. intelligence community • How Trump’s apparent support for Russia empowers Putin and the Kremlin to continue meddling into U.S. elections • How Russia’s actions are emboldening other non-state actors • Why Trump’s denial of Russian meddling into U.S. elections can further damage U.S. relations with its allies Contact us to schedule an interview with Albert or to learn more about his expertise. Source:

Forecasting sales using financial stock market data

Firms use many kinds of data for forecasting future sales—one of the key activities in the management of a business—and combine various methods in order to utilize different types of information. A recent study by Nikolay Osadchiy, assistant professor of information systems and operations management; Vishal Gaur (Cornell); and Sridhar Seshadri (UT Austin) focuses on financial stock market data in developing a new methodology for firm-level sales forecasting, testing it against standard benchmarks such as forecasts from equity analysts and time-series methods. Applying their method to the forecast of total annual sales for US public retail firms, the researchers find their market-based approach achieves an average 15 percent reduction in forecasting error compared with more typical forecasting methods. Their model, they write, can also be applied to hedging operational risk with financial instruments. Source:

The impact of behavioral bias on decision-making

For business leaders, the ability to make critical decisions in a dynamic work and industry environment is essential to the success of an organization. However, Diwas KC, associate professor of information systems & operations management, and coauthors Francesca Gino (Harvard U) and Bradley R. Staats (UNC) note that behavioral traits can sometimes impact the ability to weigh new information and make a logical decision, even in the face of negative news. KC, Gino, and Staats analyze 147,000 choices made by cardiologists during a six-year period when they were presented with negative news from the FDA about drug-eluting stents used in angioplasty. The experienced cardiologists were more likely to continue using the questionable stents than their less-experienced peers, even after being informed of the problem. The role of influence also played a factor in the decision-making. They add, “Given that those who feel they are expert are less likely to react to negative news, those around them show the same tendency, thus making worse decisions than those in groups with less perceived expertise.” The seasoned cardiologists were better able to “generate counterexamples to the negative news and thus be susceptible to confirmation bias.” The authors note managers should be aware that more experience and the perception of expertise may bias decision-making. Source:

Significance of pricing and product-line strategies

In new research, Ramnath Chellappa, associate professor of information systems & operations management, and coauthor Amit Mehra (U Texas) investigate the business practice of IT “versioning,” whereby a company creates different models of a product in order to charge varying prices for each one. Much research takes into account economies of scale and a company’s marginal costs—the price of making an additional unit of a product. However, Chellappa and Mehra note that companies also need to consider consumer usage costs when they decide to create various versions of the same IT product. But for IT products and services, the “costs” are not monetary. The pair note the “time commitment and physical effort” to use IT products or services. They use the example of mobile devices: “One cannot enjoy these information goods without them consuming resources such as memory and processing power.” They determine that “this consumption-related disutility” is critical to feature bundling and consumer segmentation. The researchers create a model to test the consumer cost impact, using a “digital goods firm with a unique production cost structure and agents—consumers who face resource constraints in consuming these goods.” Given the usage costs, they determine that individuals may not necessarily prefer products with more features to lower-quality items. The pair concludes “marginal cost and consumers’ usage costs have the same impact on versioning strategy.” Source:

Managing style and product design

Mobile phones look very different now than they did ten years ago. With access to all of the design patents available from the US Patent & Trademark Office (including ones from products in the telecommunications industry), Tian Heong Chan, assistant professor of information systems & operations management, and coauthors Jürgen Mihm (INSEAD) and Manuel E. Sosa (INSEAD) show how one can cluster them according to their visual similarities. The process results in an evolutionary timeline charting the successive styles of mobile phones from “clamshell” to “touchscreen slate” and everything in between. This approach creates a novel data platform from which researchers can start testing hypotheses about how product forms evolve. With the data, the authors show that there is increasing turbulence (or unpredictability in the change in product forms) across all product categories. In other words, it is much harder now than in the past to predict what the next hot style will be based on current trends. This is especially salient in non-tech categories, such as furniture and fashion. The authors conclude that companies with the capability to manage this increasing uncertainty will have a significant competitive advantage in the future. Source:

Markdown Management and Shopping Behavior

Consumers face the trade-off of immediately paying tag price for an item or waiting for a time when it might be marked down but out of stock. In new research, Nikolay Osadchiy, assistant professor of information systems & operations management, Manel Baucells (U of Virginia), and Anton Ovchinnikov (Queen’s U) argue that retailers can better optimize markdowns by paying more attention to this particular type of consumer behavior. The researchers approach the consumer waitor-buy decision as a “multidimensional trade-off between the delay in getting an item, the likelihood of getting it, and the magnitude of the price discount.” Those dimensions need not be independent; for example, the consumer patience (or sensitivity to delay) could depend on the magnitude of markdown. By optimizing the model, they find that retailers can substantially increase revenues by offering larger markdowns than the current state of the art suggests. In the experiments involving business school students as well as Amazon Mturk participants, which is an on-demand, scalable workforce, the trio found that the expected revenue gains are between 1.5% and 2%. Source:

Team leader experience in improvement teams

According to research from George Easton and Eve Rosenzweig, both associate professors of information systems & operations management, a team leader’s social capital and experience leading projects of the same type are factors in the effectiveness of an improvement team. By using six years of six sigma improvement project data from a Fortune 500 consumer products manufacturer, the researchers reached a rather surprising finding regarding a team leader’s social capital. Improvement teams do not appear to benefit from the leader’s experience working with the current team members on prior projects. What matters instead is the team leader’s experience working with a variety of people on prior improvement projects. The researchers suggest that the experience of dealing with many different individuals allows improvement team leaders to better identify suitable people to join their teams. Such a variety of experience also likely makes team leaders more politically astute when determining projects to pursue. In addition, the professors found that a team leader’s experience with the same type of project is important during the early stages of a six sigma implementation. The importance of this kind of experience declines as the system becomes more mature. The professors suggest that in a mature six sigma deployment, the organization’s cumulative body of documented learnings may well substitute for a team leader’s own prior experience leading a particular project type. Source:

CFOs & earnings misrepresentation

The quality of a company’s earnings is determined by controllable factors, such as internal controls and corporate governance, and noncontrollable factors, such as industry and economic conditions. But CFOs also have considerable influence over the communication and presentation of those earnings. In a new research study, Ilia Dichev, Goizueta Foundation Chair, professor of accounting, and coauthors John Graham (Duke U), Campbell R. Harvey (Duke U), and Shiva Rajgopal (Columbia U) note that discretion in accounting methods allows CFOs to misrepresent earnings. CFOs are motivated to misrepresent earnings in order to increase stock price and meet earnings targets, as well as boost their own compensation and career profile. The authors conducted a survey of 375 CFOs to explore their definition of earnings quality and ways to determine earnings misrepresentation. The authors concluded that “in any given period, a remarkable 20% of companies intentionally distort earnings, even while adhering to GAAP (generally accepted accounting principles).” The study found a number of red flags for earnings misrepresentation, including “a lack of correspondence between GAAP earnings and cash flows from operations, and unexplained deviations from peer and industry norms.” Source:

Integrating knowledge in outsourced software development

Despite the prevalence of using outside vendors to handle a company’s software development, little is known about the best way to effectively share the knowledge critical to a project’s success among the client and vendor software team members. In research from Anandhi Bharadwaj, professor of information systems & operations management (ISOM) and Goizueta Term Chair in ISOM, and coauthor Nikhil Mehta (U of Northern Iowa), the duo determined that knowledge integration on outsourced projects is further complicated by the uncertainty often inherent in software development. Bharadwaj and Mehta analyzed 139 vendor development teams taken from sixteen Indian software companies for their research. The authors found that the manner in which software teams share and protect the information resources they have impacts the knowledge integration ability of the team. Since software teams operate under conditions of resource scarcity and dependence, team leaders need to ensure that their software development teams have not only the requisite technical skills but also the ability to import needed skills and knowledge from external sources and share it effectively within the team. An important implication of Bharadwaj and Mehta’s research is that organizations should develop holistic performance appraisal policies that assess software developers for both intergroup and within-group activities. Source:

Supply network structure and systemic risk

Demand uncertainty can present a serious challenge for any business, especially when it comes to managerial decisions on inventory. But when an economic downturn happens, the challenge becomes systemic. According to research by Nikolay Osadchiy, assistant professor of information systems & operations management, and coauthors Vishal Gaur (Cornell U) and Sridhar Seshadri (Indian School of Business), systemic risk is more greatly felt depending on where a company sits in the supply chain. The trio discovered that while an economic downturn presented a serious hurdle for retailers, wholesalers, and manufacturers alike, manufacturers were more prone to systemic risk given their placement upstream in the supply chain. Manufacturers had “a more dispersed customer base,” which the authors noted was more closely “associated with higher systematic risk.” Manufacturers also experienced greater systemic risk due to the effect of aggregation of orders over time. They wrote, “A market shock in one period may affect sales over several periods due to lead times and time lags in managerial decision making.” Source: