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Study of auto recalls shows carmakers delay announcements until they can 'hide in the herd'

BLOOMINGTON, Ind. - Automotive recalls are occurring at record levels, but seem to be announced after inexplicable delays. A research study of 48 years of auto recalls announced in the United States finds carmakers frequently wait to make their announcements until after a competitor issues a recall - even if it is unrelated to similar defects. This suggests that recall announcements may not be triggered solely by individual firms' product quality defect awareness or concern for the public interest, but may also be influenced by competitor recalls, a phenomenon that no prior research had investigated. Researchers analyzed 3,117 auto recalls over a 48-year period -- from 1966 to 2013 -- using a model to investigate recall clustering and categorized recalls as leading or following within a cluster. They found that 73 percent of recalls occurred in clusters that lasted 34 days and had 7.6 following recalls on average. On average, a cluster formed after a 16-day gap in which no recalls were announced. They found 266 such clusters over the period studied. "The implication is that auto firms are either consciously or unconsciously delaying recall announcements until they are able to hide in the herd," said George Ball, assistant professor of operations and decision technologies and Weimer Faculty Fellow at the Indiana University Kelley School of Business. "By doing this, they experience a significantly reduced stock penalty from their recall." Ball is co-author of the study, "Hiding in the Herd: The Product Recall Clustering Phenomenon," recently published online in Manufacturing and Service Operations Management, along with faculty at the University of Illinois, the University of Notre Dame, the University of Minnesota and Michigan State University. Researchers found as much as a 67 percent stock market penalty difference between leading recalls, which initiate the cluster, and following recalls, who follow recalls and hide in the herd to experience a lower stock penalty. This indicates a "meaningful financial incentive for auto firms to cluster following recalls behind a leading recall announcement," researchers said. "This stock market penalty difference dissipates over time within a cluster. Additionally, across clusters, the stock market penalty faced by the leading recall amplifies as the time since the last cluster increases." The authors also found that firms with the highest quality reputation, in particular Toyota, triggered the most recall followers. "Even though Toyota announces some of the fewest recalls, when they do announce a recall, 31 percent of their recalls trigger a cluster and leads to many other following recalls," Ball said. "This number is between 5 and 9 percent for all other firms. This means that firms are likely to hide in the herd when the leading recall is announced by a firm with a stellar quality reputation such as Toyota. "A key recommendation of the study is for the National Highway Traffic Safety Administration (NHTSA) to require auto firms to report the specific defect awareness date for each recall, and to make this defect awareness date a searchable and publicly available data field in the auto recall dataset NHTSA provides online," Ball added. "This defect awareness date is required and made available by other federal regulators that oversee recalls in the U.S., such as the Food and Drug Administration. Making this defect awareness date a transparent, searchable and publicly available data field may discourage firms from hiding in the herd and prompt them to make more timely and transparent recall decisions." Co-authors of the study were Ujjal Mukherjee, assistant professor of business administration at the Gies College of Business at the University of Illinois who was the lead author; Kaitlin Wowak, assistant professor of IT, analytics, and operations at the Mendoza College of Business at the University of Notre Dame; Karthik Natarajan, assistant professor of supply chain and operations at the Carlson School of Management at the University of Minnesota; and Jason Miller, associate professor of supply chain management at the Broad College of Business at Michigan State University.

Power Grid Expert Weighs in on Texas Outages And How to Build a Better System

Having run countless simulations and experiments aimed at building a more resilient power grid, Luigi Vanfretti is well acquainted with the weaknesses in the nation’s current system. This expertise was recently featured in a report about the factors that caused massive, ongoing power outages in Texas. Frozen well heads, gas pipes, and other factors contributed to a “perfect storm” of conditions, Vanfretti said. Some politicians and pundits have floated the notion that the catastrophe was primarily due to frozen wind turbines, but according to Vanfretti, an associate professor of electrical, computer, and systems engineering at Rensselaer Polytechnic Institute, the problem is far more complex. Additionally, the electrical grid in Texas is unique in that it has limited connections to neighboring states, which means there are limitations to how much assistance it can receive during a crisis. “It’s about the ability to route the power,” Vanfretti recently told the Times Union. Vanfretti is an expert in power grid modeling, simulation, stability, and control. His research focuses on creating a smarter, cleaner, more reliable power grid that is capable of integrating renewable energy. Within his Analysis Laboratory for Synchrophasor and Electrical Energy Technology (ALSET) Lab, Vanfretti and his team model the power grid and run simulations in order to develop, test, and improve smart inverters, software, and hardware that will be needed to create the smart grid of the future. You can watch him discuss his research here. Vanfretti is available to speak about what contributed to the devastating outages in Texas, as well as the changes and research necessary to create a more resilient power system.

Eliminating The Barriers To Telehealth & Patient Retention

During the ongoing national pandemic, healthcare is in a period of rapid evolution, bringing telehealth to the forefront of patient care. Telehealth is a proven strategy to improve health outcomes, but it’s gated behind socioeconomic privilege and leaves behind many of our community’s most vulnerable patients. One such disparity is the inability of many Americans to access digital health care. This silent epidemic affects lives daily. Many patients, especially those in rural communities, face obstacles when trying to get the care they need. From access to reliable transportation and affordable child care to financial instability and lack of culturally competent providers, there is no shortage of hurdles standing in the way of disadvantaged populations accessing quality care. Well-implemented telehealth services can offer a clear path through these common barriers to care while improving health outcomes and boosting patient retention. “We know that mobile health intervention is an effective tool for retaining patients in care, but it’s only as effective as it is accessible,” said Richard Walsh, our CEO. “It would be negligent to assume that every individual has access to the devices, internet, or knowledge necessary to engage in telemedicine.” Like other leaders in the industry, we know telehealth is a privilege, but at Continuud, we believe it should be a right.” As Nathan Walsh, our CXO, said, “During a public health crisis such as this, we have to be proactive in ensuring that underserved communities have access to the care that they need in every way possible.” Through our research and conversations with community health leaders, we have identified 4 common barriers to telehealth success: access to video-ready phones or tablets, access to a reliable & affordable internet connection, an understanding of how to use the device to access services, and trust in technology being used for health services. Our solution is to create a platform that not only solves these problems but also enhances the patient experience and drives the best possible outcome of telehealth intervention. Our platform, Access, provides 8-inch tablets with an unlimited data connection to patients. Each device ships with a secured environment and limited functionality customized by the health care provider to include the tools that patients need to access care. We have created a simple deployment and warehousing solution to make it easy for organizations to get started quickly. Our end-to-end deployment and recall services handle every aspect of the platform so organizations can remain focused on serving their patients. The platform supports patient-by-patient interface customizations, so each patient’s experience is tailored to their unique treatment plan. We have device insurance and same-day replacement built into the program to account for loss, theft, and damaged devices, so organizations will always have access to the inventory they need to serve their clients. At Continuud, we offer an integrated ecosystem designed from the ground up to enable health care providers to work more efficiently toward a common goal of driving positive health outcomes in their communities. Continuud is known throughout Indiana for our innovative approach to connecting high-risk populations to care and implementing strategic technology to help retain and learn from patients so providers can evolve with the needs of their patients. To learn more about our platform, click here to visit our homepage. If you would like to schedule a demo with our team to talk about the platform in greater detail, click here.

Why customers hold the key to a company’s true valuation

When determining a fair valuation for a company—especially in anticipation of an initial public offering (IPO)—investors often rely heavily on “top down” approaches focusing primarily on traditional financial measures to do so. But what if this approach doesn’t paint the full picture? Daniel McCarthy, assistant professor of marketing at Emory’s Goizueta Business School, is building the case that augmenting traditional data sources with customer behavior data gives investors a more accurate company valuation. For the past several years, McCarthy and Peter Fader, professor of marketing at the Wharton School of the University of Pennsylvania, have worked to refine a customer-driven investment methodology they created. “Customer-based corporate valuation (CBCV) simply brings more focus to how individual customer behavior drives the top line,” they explained in “How to Value a Company by Analyzing Its Customers,” an article published in the Harvard Business Review (HBR) earlier this year. “This approach is driving a meaningful shift away from the common but dangerous mindset of ‘growth at all costs,’ towards revenue durability and unit economics—and bringing a much higher degree of precision, accountability, and diagnostic value to the new loyalty economy.” Fader, McCarthy’s PhD advisor while he was at Wharton, had done some of the seminal work on forecasting customer shopping/purchasing behaviors. This helped build baseline expertise for how one could go about the customer-level modeling. McCarthy recognized that this behavioral modeling could be put to good use in a financial setting, if done the right way. “There was this untapped source of intellectual property that’s been accumulating within marketing over the last 30 years,” McCarthy said. While other academics have done some conceptual work in the area, none, McCarthy noted, had done so in a way that was consistent with how financial professionals go about performing corporate valuation. McCarthy and Fader merged these well-validated customer-level models with standard corporate valuation methods, then put their resulting valuation tool head-to-head with alternative approaches. They found that their CBCV model subsequently outperformed. A full article on this subject is attached, within it, you will find key CBCV highlights such as: Using unit economics to more accurately predict revenue forecasts Gaining access to the right data The CBCV model is also good for managers and for customers Working to have publicly traded companies adopt CBCV McCarthy’s work on the CBCV methodology has earned him a number of awards, including the MSI Alden G. Clayton, American Statistical Association, INFORMS, and the Shankar-Spiegel dissertation awards. If you are a journalist covering this topic or if you want to learn more about this work or customer-based corporate valuation – then let our experts help. Daniel McCarthy is an Assistant Professor of Marketing at Emory University's Goizueta School of Business where his research specialty is the application of leading-edge statistical methodology to contemporary empirical marketing problems. If you are looking to contact Daniel – simply click on his icon now to arrange an interview today.

Why are U.S. corporate boards under-diversified?

Research tells us that firms with diverse workforces generally outperform those that do not. And in recent years, corporate America has taken significant strides towards greater heterogeneity in the employee base. But a problem remains at the top. U.S. boardrooms remain overwhelmingly Anglo Saxon and male. No less than 81 percent of the Standard & Poor (S&P) 1500 Index directors in America today are white men. White women account for 11 percent, while ethnic minority men make up 6 percent. Meanwhile, female minority board members account for just 2 percent of the total. For businesses, this is becoming problematic, not least because institutional investors and regulators like the Securities and Exchange Commission have started asking firms to open up about their processes in selecting board members. Where diversity is a criterion, firms are required to be transparent about specifications and frameworks. Shedding light on this issue is new research from Grace Pownall, professor of accounting, and Justin Short, assistant professor of accounting, at Emory University’s Goizueta Business School. Together with Zawadi Lemayian of Washington University, they parsed 12 years of data on gender, ethnicity, and salaries from the S&P 1500 to build a composite picture of who’s who and who’s paid what in U.S. boardrooms. What they found points to a systemic shortage of female and minority executives making it onto shortlists for board appointments. But that’s not all. Once women and minority men do make it onto the board, there’s another roadblock waiting for them: they are not getting promoted at the same rate as their white, male counterparts. There seem to be two complex dynamics at play, said Short: a glass ceiling effect hampering the upward trajectory of Black, female, and other minority executives, and what he and his co-authors call “myopic” bias on the part of corporate America. “We developed two hypotheses that might explain what’s behind the lack of diversity on boards,” explained Short. “The glass ceiling hypothesis comes from what we see as a shortfall of women and ethnic minorities in the workforce relative to white men—so the theory here is that these groups just aren’t getting promoted to the point where they would be considered for board positions.” “The alternative hypothesis we worked on was that there might actually be a plentiful supply, but that companies just don’t see directors from different backgrounds as being as valuable in the same way,” he said. “And we would put this down to some kind of institutional myopia or bias at the very highest echelons of business.” To put these hypotheses to the test, Short and his colleagues first collected demographical data on American board members from a database compiled by Institutional Shareholders Services. Here they were able to determine the gender and ethnicity of individuals. They also ran a simple statistical regression on salaries using data from S&P. Then they compared the two. “Economic theory tells us that if there’s a high demand for diverse directors—women and ethnic minorities—and there’s a low supply of them, then these directors will be able to command higher salaries than others,” said Short. “It’s a simple case of supply and demand, and minorities will come at a greater premium.” Looking at the S&P 1500 data, they found that female and minority directors were indeed getting paid more on average than white male counterparts in other companies. And when they analyzed this more closely, Short and his co-authors found that these salaries were in general being paid by larger, more successful firms. “We can see that women and minorities are commanding higher compensation than the average white male director across the S&P universe of 1500 companies, and it’s the bigger, better paying firms that are hiring them,” Short said. “So that tells us that the top companies are proactively trying to build diversity in their boardrooms. At the same time, it shows there is a deficit of supply in this talent pool—the so-called glass ceiling dynamic.” To understand whether bias or institutional myopia might also be limiting the prospects of Black, female, and ethnic directors, Short et al. also looked at differences in compensation within the same company, and here they found something striking. While they made more on average than the typical white male director in U.S. firms, minority directors were being paid around 3 percent less than their direct counterparts – the white male directors on the same board. All this scrutiny begs the questions: What is going on in the American boardroom? And why is there still such a stark lack of diversity in the upper echelons of business in the U.S. today? “This tells us something important,” said Short. “Once these directors make it to the board, for most of them that’s it. They don’t advance or achieve promotion at the same rate.” This could be due to bias or what Short calls a Rolodex effect: “Maybe it’s because they didn’t go to the same school as the chairman of the board, or weren’t connected socially in the same way, so they don’t appear in the Rolodex of candidates with right or familiar credentials to get promoted within the board,” he said. “We know it’s not about hard skills or aptitudes because the data shows us that women and minority directors typically hold more qualifications than their counterparts. But for whatever reason, once they are on the board, they fail to advance in the same way as white men.” Interestingly, Short and his colleagues found that there was a very small number of women and minority directors sitting on the boards of multiple companies in the U.S. “Pulling it all together, we see that there’s a generalized shortage of women and ethnic group candidates in the U.S.,” Short said. “Successful companies are proactively on the lookout for them and offer higher compensation to attract them. “But there seems to be a glass ceiling effect acting as a bottle neck for talent. We also see that minority directors become a bit stuck once they’re on a board. The upward momentum tails off relative to their white, male colleagues. This could be due to bias or myopic thinking.” All of this should provide rich food for thought for the most senior decision-makers in U.S. enterprises, according to Short and his co-authors. With the pressure on to drive board-level diversity in corporate American, leaders need to be cognizant of the roadblocks or cut-off points to tie to ethnicity and gender. “Diversity is something we urgently need to enable and nurture in the United States. Without diversity, creativity and innovation can stall, and in business you run the risk of deferring to group think—sourcing ideas and perspectives from the same small pool of shared experience or expertise,” said Short. “It’s encouraging to see that diversity has increased over time and the largest companies are proactive. But there are still vast gaps of representation on the board compared to the workforce. There’s still work to be done because diversity in American business should be commonplace.” If you are a journalist looking to cover this research or to learn more about the diversification of corporate boards in America, then let our experts help. Grace Pownall, professor of accounting, and Justin Short, assistant professor of accounting, at Emory University’s Goizueta Business School are both available for interviews; simply click on either expert's icon to arrange a time today.

Big Data Offers New Insights Into Biological Components of Autism Spectrum Disorder

In recently published research, blood sample analysis showed that mothers of children with autism spectrum disorder (ASD) had several significantly different metabolite levels two to five years after they gave birth when compared to mothers of typically developing children. The research team behind this finding was Juergen Hahn, the head of the Department of Biomedical Engineering at Rensselaer Polytechnic Institute, a pioneer in the use of big data to investigate biological components of ASD. Hahn is available to discuss the findings of his recent research, as well as his overall approach to studying autism. Previously, Hahn discovered patterns with certain metabolites in the blood of children with autism that can be used to successfully predict diagnosis. He has since successfully applied his big data approach to evaluating potential ASD treatments. For the recent paper, which Hahn co-authored, his team analyzed blood samples from 30 mothers whose young children had been diagnosed with ASD and 29 mothers of typically developing children. They found differences in several metabolite levels between the two groups of mothers. While the samples analyzed were taken two to five years after pregnancy, these research findings raise the question of whether or not the differences in metabolites may have been present during pregnancy as well. In addition to his specific findings, Hahn is available to discuss the use of big data in improving society's understanding of the biological mechanisms at work in ASD.

Examining the Popularity of the Bernie Sanders Meme

The image is a familiar one to millions across the country: Senator Bernie Sanders sitting with his legs crossed and arms across his chest—wearing a face mask, warm coat and knitted mittens—and watching as Joe Biden was sworn in as the 46th president of the United States on January 20, 2021. Two weeks later, however, the photo looks different. That's because very quickly that inauguration snapshot became an internet sensation, with people photoshopping it to create social media memes—placing Senator Sanders in famous paintings or scenes in movies ranging from the Breakfast Club to Star Trek. But what it is that draws people to these scenes and motivates them to create memes? Charles L. Folk, PhD, a professor of psychological and brain sciences at Villanova University, discusses the psychology behind it all. “Scenes and people activate ‘schemas’ in our memory,” says Dr. Folk. “Schemas are organized structures of knowledge, stored in memory, that are built up through experience. For example, we all have a ‘restaurant’ schema that stores information about the things that are typically in restaurants and the kinds of interactions we can expect in a restaurant.” Research suggests that our attention is drawn to objects that are incongruous with the “context” of a scene, Dr. Folk notes. “Thus, if we see a bedroom scene, our bedroom schema is activated, and our attention would be drawn to an object that is incongruent with that schema—like a toaster in a bedroom scene.” Dr. Folk shares that we have schemas for people as well. “Seeing Bernie Sanders activates our Bernie schema,” he says. “Bernie, in particular, has a very unique schema—so just seeing the picture of Bernie with his Vermont mittens is interesting/humorous because it is quite consistent with our schema of him.” “However, activating our Bernie schema in the context of an incongruent scene schema—like Bernie sitting on the bridge of the Starship Enterprise or a well-known movie set/scene—is particularly alluring precisely because of that incongruity,” continues Dr. Folk. Dr. Folk notes that the development of the app that can place the Bernie meme anywhere in Google Maps motivates people further to create their own versions of outrageous incongruity. “This contributes to the viral nature of the meme,” Dr. Folk says.

Consumer Behavior Has Shifted Significantly During Pandemic, Survey Reveals

The COVID-19 pandemic has brought about significant shifts in people’s behaviors, from a sharp increase in telework and online commerce, to a significant decrease in the number of personal trips people make. Understanding the effects of these rapid changes on the economy, supply chains, and the environment is essential, as some of these behaviors will continue even after the pandemic has ended. José Holguín-Veras, the director of the Center for Infrastructure, Transportation, and the Environment at Rensselaer Polytechnic Institute, is part of a research team conducting a series of surveys in an effort to quantify and understand these unprecedented shifts. For instance, according to the team’s surveys, the number of monthly work trips people made during the start of the pandemic decreased by 60%. Post-pandemic, respondents believe they will still be making fewer work trips than before, down by 8.2%. Monthly grocery store trips decreased by 41.6% when the pandemic happened, with some people shopping less frequently and others shifting to grocery purchases online. Post-pandemic, survey respondents expect to return to the grocery store more often, but still less than before the pandemic began, by about 8.2%. In contrast, monthly delivery of groceries increased by 132.2% during the pandemic, a trend that may not disappear once the pandemic is over. Respondents expect that post-pandemic, their monthly grocery deliveries will still be 63.8% higher than before COVID-19. While all package deliveries increased during this pandemic period, the grocery delivery increase was the largest. The researchers hope their findings help policymakers develop future policies to offset not just the effects of COVID-19, but also the lasting changes that may result even after the pandemic has ended. Holguín-Veras is available to talk about the research team’s findings, and the importance of understanding these significant shifts.

Renowned educator and author Gloria Ladson-Billings to present Georgia Southern 2021 Fries Lecture

Gloria Ladson-Billings, Ph.D., renowned pedagogical theorist, teacher educator and author, will present the 2021 Norman Fries Distinguished Lecture, hosted by Georgia Southern University’s College of Education. In her lecture, “Culturally Responsive Pedagogy: Educating Past Pandemics,” Ladson-Billings will discuss how pandemics provide opportunities for revisioning and reimagining culturally relevant teaching practices. She suggests that instead of “getting back to normal,” it is time to get on to new and more equitable ways of educating all students and creating a more democratic society. Ladson-Billings is the former Kellner Family Distinguished Professor of Urban Education in the Department of Curriculum and Instruction and faculty affiliate in the Department of Educational Policy Studies at the University of Wisconsin-Madison. She also served as the 2005-06 president of the American Educational Research Association (AERA). Ladson-Billings’ research examines the pedagogical practices of teachers who are successful with Black students. She also investigates critical race theory applications to education. She is the author of critically acclaimed books The Dreamkeepers: Successful Teachers of African American Children and Crossing Over to Canaan: The Journey of New Teachers in Diverse Classrooms, as well as numerous journal articles and book chapters. About Ladson-Billings Former editor of the American Educational Research Journal and a member of several editorial boards, Ladson-Billings’ work has won multiple scholarly awards including the H.I. Romnes Faculty Fellowship, the National Academy of Education/Spencer Postdoctoral Fellowship and the Palmer O. Johnson Outstanding Research Award. She is a 2018 recipient of the AERA Distinguished Research Award and was elected to the American Academy of Arts and Sciences in 2018. About the Norman Fries Distinguished Lectureship series The annual Norman Fries Distinguished Lectureship series began in 2001. It is funded by an endowment in honor of Norman Fries, founder of Claxton Poultry. In his more than 50 years of business, Fries built the company from a one-man operation into one of the largest poultry production plants in the U.S. Past Fries lecturers include David Oreck of Oreck Vacuums, South African apartheid author and lecturer Mark Mathabane, NASA director James W. Kennedy, Pulitzer Prize-winning author and historian Gordon S. Wood, Nobel Prize laureate William D. Phillips, Ph.D., bestselling author Susan Orlean, concussion expert Dr. Russell Gore, and PricewaterhouseCoopers Network chief operating officer Carol Sawdye. The lecture will take place virtually via Zoom on Feb. 8 at 7 p.m. The event is free and open to the public. If you are a journalist looking to know more about the Norman Fries Distinguished Lectureship or would like to interview Gloria Ladson-Billings  -- simply reach out to Georgia Southern Director of Communications Jennifer Wise at jwise@georgiasouthern.edu to set and time and date.

Georgia Southern cuts the ribbon on a new $60 million facility that will be the epicenter for engineering excellence and innovation

Last Friday, Georgia Southern officially opened its new Engineering and Research Building for students and researchers, a facility that will serve as the epicenter for engineering excellence and innovation in southeast Georgia. The building is designed to facilitate academic and institutional partnerships, inspire creative engineering and accelerate academic success for students in the College of Engineering and Computing. Through the instructional research labs and academic spaces that bridge theory and practice, students will be prepared to solve today’s challenges and to make tomorrow’s discoveries. “Today marks the culmination of years of forethought and investment from a number of state leaders, industry leaders and local advocates, who paved the way for us to be here,” said Georgia Southern President Kyle Marrero. “Leaders who, dating back to the 90s, could see the future of a growing industry, a state on the precipice of being a national leader in technology and innovation, and a critical need to develop talent in applied engineering across south Georgia.” The Engineering and Research Building’s sleek, contemporary environment defined by glass and natural light, soaring high-bay ceilings and modern, industrial feel is strengthened by new, industry-relevant equipment, instrumentation and technology that encourage active learning and sustainability. The highly efficient facility includes sustainable features that complements existing spaces on campus. The three-story building houses applied research spaces with a strong focus on manufacturing engineering, civil engineering, electrical and computer engineering, and mechanical engineering. The workspaces can be easily reconfigured for various uses, projects and applications and provide students with access to industry-grade equipment as well as expanded opportunities for undergraduate research. “The investment of the Engineering and Research Building solidifies Georgia Southern University’s commitment to students in providing a world-class education in the engineering field, while providing the space and resources necessary to facilitate such,” said student Kristifer Bell. “I am enthusiastic to continue my research work and look forward to the interdepartmental collaboration that will be encouraged through the housing of new student and faculty labs under one roof.” The full media release about this historic occasion is attached – and if you are a journalist looking to know more about this facility or Southern Georgia University -- simply reach out to Georgia Southern Director of Communications Jennifer Wise at jwise@georgiasouthern.edu to set and time and date.