Faculty

You probably didn't stop to consider that the $2 tip you left the waiter at lunch today involves a complex web of social psychology, personal morality and economics. In a study of the tipping behavior of individuals and groups, W. P. Carey School of Business economics professor William J. Boyes and his colleagues agree that tipping is "in essence, an implicit contract created between employer, employee and customer." But it's not just the quality of service that determines a customer's tipping behavior, Boyes says. Variables such as a group's size, type of event, even the sex of the customer are some of the factors at play.

A company is unlikely to gain satisfied and loyal customers when they feel they've been duped. Companies that employ stealth marketing — otherwise known as undercover or guerilla marketing — hire shills to pitch products or services to potential but unsuspecting consumers. It may seem a clever idea on its surface, but research shows stealth marketing can be a risky tactic. Several W. P. Carey School of Business professors recently shared their opinions of stealth marketing, citing examples of campaigns that backfired, alienating rather than attracting potential customers.

When an employee underperforms, supervisors must decide whether to fire that person or wait to see whether performance improves. In the balance are the transition costs of finding a replacement and getting that person up to speed mdash; costs could be saved if the original employee improves. For the sponsor of a retirement plan, the decision to fire an investment management firm that is producing disappointing results also carries a cost, which ultimately impacts the its beneficiaries. Plan sponsors often chase what W. P. Carey School finance Professor Sunil Wahal calls "hot hands" — investment managers who have recently turned in high numbers. But in a study that has attracted attention from both sponsors and managers, Wahal suggests that expecting a newly hired high flier to continue at top altitude may sometimes be expecting too much.

It has long been the practice of business to employ lobbyists in an attempt to influence policy makers and regulators about such issues as environmental laws, trade policies and government spending programs. Amid the current media frenzy over the bribery scandal involving lobbyist Jack Abramoff, a researcher at the W. P. Carey School of Business discusses a new strategy for businesses: the cultivation of employee involvement in lobbying through education and solicitation of workers' feedback. Gerry Keim, associate dean of MBA programs, suggests that employers invest in educating employees about how the public policy process affects them. Employee-supported business lobbying promises to be more effective than traditional business lobbying, Keim says, and could bring about government policies that benefit more people all along the economic scale.

What does it take to get a new venture up and running? Conventional wisdom suggests that the entrepreneurs should hit the pavement in high gear and then keep up the pace. Research shows, however, that speed alone is not a guarantee for success. A W. P. Carey School professor and entrepreneur has evidence that entrepreneurs need to allow enough time to make good decisions, to be creative, and to capitalize on serendipity. Executing tactical events through a slow and steady pace, rather than rushing to get to market first, gives entrepreneurs the experience and confidence necessary to make important strategic and visionary decisions that help them over the tipping point.