From the WorldCom and Enron accounting debacles that triggered the demise of Arthur Andersen to Ernst & Young's 2013 and 2015 settlements claiming that its audits facilitated massive accounting fraud by financial services firm Lehman Brothers, large-scale financial scandals have led to increasing scrutiny of public auditors. Investors are justifiably eager to ascertain the quality of audits of public companies when making investment decisions. In the U.K., the reputation of the audit partner is recognized as a signal of audit quality, and as such, the names of the lead partner have been disclosed to the public since 2009. The U.S. standard of providing the auditing firm name without identifying the lead partner recently changed to match the U.K. and EU standard after much debate. As of May 2016, the Public Company Accounting Oversight Board has adopted-and the Securities and Exchange Commission has approved-new regulations that will require the public disclosure of the individual audit partner responsible for each public company audit, as well as the identification of any additional accounting firms that contribute to the audit. This article examines the new rules in light of disclosure requirements imposed on other professionals, as well as international auditor disclosure requirements. The accounting profession has generally opposed the new disclosures, but this article suggests opportunities and benefits for the profession as a result of the changes, including the opportunity for audit partners to develop individual reputations for quality and specialization. In addition, this article makes recommendations for business managers, owners, and investors for making the best use of the information the new disclosures will provide.

Can benefit corporations be held accountable for delivering requisite public goods? An oft-cited criticism is that they cannot, but little empirical research exists to support that claim. Based on an in-depth case study of the oldest corporation to amend its governing documents as a public benefit corporation (PBC) under Delaware law, this article suggests that a company can be held accountable for delivering requisite public goods when external mechanisms are accompanied by an organization's internal commitment to self-awareness, learning, and measurement. In the case in question, the company established a three-pillar structure focused on professional engagement, community support, and charitable giving built on a six-year-old sustainability initiative, accompanied by an adaptive learning culture, and driven by top-down and bottom-up efforts. Current challenges include measuring impact and branding the PBC to grow the company's business.

A new age of pay transparency began on January 11, 2016, when Executive Order 13665 took effect. Applying to employers who have contracts valued over $10,000 with the U.S. government, the order prohibits them from retaliating against employees for disclosure and discussion of compensation information. This effectively increases pay transparency for an estimated 20% (28 million workers) of the labor force. As a result, the difference in pay between men and women and between white and minority employees is now under increased scrutiny. This article aids employers in this new era of heightened attention to their compensation practices. We begin with an overview of the current dimensions of pay gaps in the U.S., providing a societal level perspective. Pay transparency is emphasized as a means to help narrow earnings gaps at the firm level. Legal, regulatory, and social aspects of pay disclosure are discussed and employers currently using pay transparency are highlighted. We also present management responsibilities and practices for the new age of pay transparency.

This work presents REPITA (Research-Ecosystem-People-Intellectual Property-Transfer-Alignment), a prescriptive and repeatable model for successful technology-based academic entrepreneurship, synthesized from research of academic entrepreneurship in developing economy conditions. In this work, we identify three deficiencies in Mexico's entrepreneurship ecosystem: research skills, high technology, and technology transfer. We then present a solution that has been recognized by the Organization for Economic Co-operation and Development (OECD) for fueling high-tech university spin-offs with science and technology doctoral research. Lessons from 48 spin-off projects are synthesized in the newly proposed REPITA model, which prescribes connecting a basic research platform to applications, catalyzing the entrepreneurship ecosystem with resources and incentives, combining highly specialized people in entrepreneurial teams, setting generous and flexible intellectual property policies for the knowledge economy, transferring technology per entry and exit strategies, and aligning technology and business incubation. Finally, we propose a tool that presents academic entrepreneurship theories in an actionable format for university administrators and entrepreneurs. These results are not a theoretical framework on their own, but rather a real-world organizational model based on theory for impelling technology-based, academic spin-offs with economic impact. Taken together, this contribution may be useful to practitioners and provocative for researchers.

Most organizations faced with a crisis will rely on the leader in place at that time to lead them out of the crisis, often with disastrous results. When the crisis gets out of hand, these organizations realize belatedly that the current leader does not necessarily possess the leadership style required to manage the crisis effectively. We present three crisis response leadership principles (CRLP) to help organizations successfully prepare for and manage a crisis. To accompany the CRLP, we provide the crisis response leadership matrix (CRLM), a prescriptive guide to help an organization improve its initial response and enhance the effectiveness of its crisis management efforts. Combining the element of organizational culture with individual leadership styles, the CRLM offers a standard methodology that allows organizations to match a given crisis with the best possible crisis response leader. We present a real-world case study that describes a successful implementation of the approach: the U.S. Air Force Taiwan-4 crisis. Organizations adopting this methodology can confidently choose the right person to lead a swift, effective response to a crisis.

This article helps close two voids in the literature dealing with dual language (bilingual) marketing. First, it adds to the discussion about whether dual language (specifically English/Spanish) marketing that targets Hispanic consumers living in the U.S. is socially responsible. Second, it discusses how U.S. Hispanics feel about learning English and why some react negatively to bilingual marketing efforts. To determine whether dual language marketing is socially responsible, the corporate governance theories of Milton Friedman and R. Edward Freeman are used. The first conclusion is that, from Friedman's shareholder perspective, bilingual marketing may be much less profitable than expected, if at all. From Freeman's stakeholder perspective, dual language marketing is socially responsible if the focus is on perceived short-term needs of Hispanic consumers; however, from a broader, long-term societal approach, it is not. The second conclusion is that non-Hispanic Americans do not favor bilingual marketing. Recommendations for socially responsible ways of targeting this group are discussed.

In May 2014, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) issued a converged standard on revenue recognition (ASC Topic 606 and IFRS 15, respectively) aimed at ameliorating difficulties associated with determining when to recognize revenue and at what amount. Prior revenue recognition standards applied broad concepts together with a variety of requirements for specific industries or types of transactions, sometimes resulting in divergent accounting for economically similar transactions. In contrast, the new standard outlined a single comprehensive model to use in accounting for revenue from contracts with customers. Although the new standard simplified the guidelines down to one framework, it also generally required firms to use more judgment and estimation than prior guidance. In its second quarter of 2014 financial statement filed with the Securities and Exchange Commission (SEC) in August 2014, New York-based airliner JetBlue Airways Corporation (JetBlue) [NASDAQ: JBLU] acknowledged the new revenue recognition standard. While it had yet to determine the full impact of adoption, changes were imminent. This case examines how companies' accounting practices are affected by broad-based new accounting standards. It is designed to introduce the new revenue recognition standard, and help students walk through an assessment of how the standard might impact a company like JetBlue Airways.

During the last few decades, China has experienced spectacular rates of economic growth, which dwarf those of developed Western countries. This case describes the major policy reforms that have allowed China to transition from an agrarian-based economy to the manufacturing powerhouse it is today. Also discussed are some of the negative consequences of rapid economic growth, the reasons behind China's recent slowdown, as well as the government's current efforts to reorient the economy, financial system, and policies affecting international trade and investments.

A college entrepreneur named Emily Levy founded MightyWellâ„¢ when she faced a personal challenge following her diagnosis with chronic, or more properly called, Post-treatment Lyme disease. Emily identified the need for an improved fabric cover to protect and fashionably hide a Peripherally Inserted Central Catheter (PICC) line that was inserted in her arm to deliver antibiotics to her heart. Over the course of two years, while completing her undergraduate degree, Emily designed, developed, manufactured, and sold her product while bootstrapping[1] her venture. She competed in 17 business competitions and won prizes in 15, before being awarded $250,000 as the 2016 winner of the Babson Breakaway Challenge. Emily is now rebranding and pursuing a product expansion initiative to transform her company from a single product to a brand of wellness wear[2] and products attractive to a larger base of medical patients.

Companies worry about employee attrition, but it's especially costly in one function: sales. Estimates of annual turnover among U.S. salespeople run as high as 27%. A new study can help managers identify good salespeople who are at risk of quitting and take steps to retain them. Researchers examined more than two years' worth of data from a telecommunications company and created a quantitative model--the first of its kind--to predict which salespeople were likely to quit. They found, as expected, that those with high ratings in historical performance and customer satisfaction were less likely to leave than average and low performers. But when it came to quota attainment, both high and low performers were less likely than average performers to quit. And the biggest surprise concerned peer effects, which proved the strongest predictor of quitting. Employees at companies with little variation in performance had a greater tendency to leave (they had little incentive to work harder or smarter, the researchers theorized). Also at risk: salespeople in settings with high turnover, whether voluntary or not, suggesting that turnover can be contagious. Drawing on these results, the researchers say, managers can use big data to identify variables that predict turnover in their own ranks and decide which members of the high-risk group warrant interventions to help them stay put.

When a team of researchers compared population-density figures against data on people's willingness to invest in education, save for retirement, and otherwise plan for the future, they found that the residents of more-populated states and countries had a decidedly longer-term outlook.

After hearing from friends that SoulCycle's very first studio was different from other cycling studios, Whelan decided to give it a try. One visit was all it took for her to appreciate the full sensory experience, the charismatic instructor, and the passion of the client community. A few years later she joined the company, which today operates 74 studios. SoulCycle doesn't view itself as a fitness company--it's a "player in the broader experiential economy." That's why it takes a different approach to recruiting and training instructors, with the aim of making them inspirational coaches who empower riders in their lives as well as on their bikes. It doesn't charge monthly fees, but each class costs $30 to $35, and riders must book bikes in advance, on the theory that the pay-per-class model elicits greater energy and commitment. Choosing the location for a new studio involves a year of research to understand the lifestyle of future customers. Amenities such as iPhone chargers in the lockers have improved studio design. Next-generation bikes are coming in 2017, and the company's apparel line is expanding. Because SoulCycle has friendships and community at its core, Whelan writes, the brand will endure.

Many executives feel overwhelmed by meetings, and no wonder: On average, they spend nearly 23 hours a week in them, up from less than 10 hours in the 1960s. What's more, the meetings are often poorly timed, badly run, or both. We can all joke about how painful they are, say the authors, but that pain has real consequences for teams and organizations. Every minute spent in a wasteful meeting eats into solo work that's essential for creativity and efficiency. Chopped-up schedules interrupt deep thinking, so people come to work early, stay late, or use weekends for quiet time to concentrate. And dysfunctional meeting behaviors are associated with lower levels of market share, innovation, and employment stability. The authors have found that real improvement requires systemic change, not discrete fixes. They describe a five-step process for that--along with the diagnostic work you'll need to do in advance.

When misunderstandings arise among members of global teams, it's often because managers conflate attitudes toward authority and attitudes toward decision making. However, the two are different dimensions of leadership culture, says the author, who has extensive research and consulting experience with global companies. Attitudes toward authority range from strongly hierarchical to strongly egalitarian. Approaches to decision making vary from top-down to consensual. The author explores both dimensions and classifies selected countries according to their position on both scales. The Japanese, for example, are hierarchical in their views toward authority--deferential to the boss and accustomed to waiting for instructions rather than taking the initiative--but they are consensual decision makers who get buy-in before they set a course of action. The author describes the four cultural types--consensual and egalitarian; consensual and hierarchical; top-down and hierarchical; and top-down and egalitarian--and the corresponding expectations about leadership in each environment. If you keep those in mind, you'll be more successful in your cross-cultural interactions.

Each year most public companies issue reports describing the pay packages of their CEOs. In them compensation committees attempt to explain the rationale behind the pay figures to the shareholders, who often must vote to approve them. The issue is, in their reports many committees adjust performance numbers in obscure and inappropriate ways that lead to overly generous CEO pay. And they do so using nonstandard criteria that are difficult for even sophisticated institutional investors to decode. In this article, the former executive chairman of MFS Investment Management and an MIT professor of accounting and finance sort through the reports' fine print and expose practices that stack the deck in CEOs' favor: Adjusting earnings to be 100% higher than GAAP income. Paying out 80% of an incentive award for bottom-quartile performance. Choosing "peer companies" that are not comparable in size or in industry. And more. Shareholders should be more skeptical, say the authors, and comp reports must start providing much clearer explanations. But what's needed most are new standards for compensation design and reporting.

Whether you make cars or mattresses, operate a hospital or a grocery store, or are in some other business, successful innovation depends on understanding what's driving the technological changes in your industry and anticipating what product and service features consumers will value in the future. In this article, the author describes her proven system for gaining those vital insights. The first step is to look back at the evolution of your business's technology and identify three to six dimensions where advances have significantly furthered its development--"big picture" dimensions such as cost, comfort, and safety. Next, plot the utility curve for each dimension (to see how progress on that dimension correlates with customer appreciation) and pinpoint the technology's current position on the curve. Third, decide where to focus your innovation efforts--a task made easier by using the author's matrix for scoring each dimension according to its importance to customers, its potential for improvement, and the ease with which improvements can be made. By following this three-step approach, a host of diverse companies are already creating promising new products.

Five of the 10 most valuable companies in the world today--Apple, Alphabet, Amazon, Facebook, and Microsoft--derive much of their worth from their multisided platforms, which facilitate interactions or transactions between parties. Many MSPs are more valuable than companies in the same industries that provide only products or services: For instance, Airbnb is now worth more than Marriott, the world's largest hotel chain. However, companies that weren't born as platform businesses rarely realize that they can--at least partially--turn their offerings into one, say the authors. And even if they do realize it, they often wander in the dark searching for a strategy to achieve this transformation. In this article, Hagiu and Altman provide a framework for doing so. They lay out four specific ways in which products and services can be turned into platforms and examine the strategic advantages and pitfalls of each: (1) opening the door to third parties; (2) connecting customers; (3) connecting products to connect customers; and (4) becoming a supplier to a multisided platform. These ideas can be used by physical as well as online businesses.

The U.S. Navy operates on the front lines of climate change. It manages tens of billions of dollars of assets on every continent and on every ocean, which take many years to design and build and then have decades of useful life. This means that it needs to understand now what sorts of missions it may be required to perform in 10, 20, or 30 years and what assets and infrastructure it will need to carry them out. Put another way, it needs to plan for the world that will exist at that time. The navy is clear-eyed about the challenges climate change poses. It knows that the effects of a warmer world will expand the geographic scope of its mission and increase demand for its military and humanitarian services. Climate change will also decrease its capacity to deliver those services, as the risk of damage to its bases and ports increases. This article examines the navy's approach to climate change and reflects on the implications for business.

Business leaders are scrambling to adjust to a world few imagined possible just a year ago. The myth of a borderless world has come crashing down. Traditional pillars of open markets--the United States and the UK--are wobbling, and China is positioning itself as globalization's staunchest defender. Countries throughout North America and Europe have experienced waves of anti-globalization sentiment. In the face of such uncertainty, leaders of multinationals wonder whether they should retreat, change strategy, or stay the course. In making that decision, they need to understand two things. First, the world is less globalized than even experienced executives realize. Second, history tells us that even in the face of a trade war, international trade and investment would still be too large for strategists to ignore. Today's turmoil calls not for a mass retreat from globalization but for a more subtle reworking of multinationals' strategies. This article examines common misperceptions about what is--and isn't--changing about globalization and offers guidelines to help leaders decide where and how to compete in a complex world.

Ginni Rometty has spent 36 years at IBM, where she now serves as president, CEO, and chairman of the board. She is on a protracted mission to reinvent the company as a cloud-based "solutions" business. That transformation involves moving into areas that have higher value and shedding ones that don't. IBM's new businesses around cloud, data, and security account for almost $34 billion in revenue. They're growing by more than 13% a year and constitute 42% of the company. In this interview Rometty says that IBM is trying to "unlock" the 80% of data behind the firewalls of client companies so that those organizations can use it to make better decisions, adding, "There's a $2 trillion market around better decision making." She talks about why IBM's earnings have declined for 20 consecutive quarters, what kinds of employees the company's new course demands, gender-related challenges in her career, and more.