Explore the faculty research, thought leadership, and groundbreaking philosophies that established Michigan Ross as one of the world’s top business schools.
Professor Jim Walsh played a significant role in the development of work on individual, group, and collective cognition in organizations. Interested in managerial mistakes, Walsh wanted to know if executives’ worldviews could blind them to their decision environments. He was also interested in learning how the cognitive capabilities of both leadership teams and the organization itself could be harnessed for the good of organizations. In a 1988 Academy of Management Journal article, Walsh traced how these belief structures might or might not blind executives to their decision environments. He also considered how these belief structures may or may not combine to shape team decision-making. Therefore, he wrote a theoretical paper about these possibilities, which was published in the Journal of Management in 1986. He followed up that article with an empirical effort to measure and trace the impact of “negotiated belief structures” on decision-making (Organizational Behavior and Human Decision Processes published his findings in 1988). His thoughts then turned to the organization as a whole. He wrote a seminal paper on organizational memory, one that identified the nature of information selection, retention, and retrieval processes in organizations – for the good or ill of those organizations. That work was published in the Academy of Management Review in 1991. When interest in cognition in organizations started to grow, Walsh became a founding officer of the Academy of Management’s Managerial and Organizational Cognition Interest Group in 1990 and helped to lead that pioneering group of scholars for the first three years of its existence. Tying all of the insights and experiences together, he wrote what became something of a field-defining scholarly paper in 1995. Titled “Managerial Organizational Cognition: Notes from a Trip Down Memory Lane,” it was published in Organization Science. Today the Managerial and Organizational Cognition Division of the Academy of Management is home to more than 1,200 scholars worldwide. Citing his foundational scholarship and early leadership, the Division honored Jim with its Distinguished Scholar Award in 2020.
No matter the discipline, business research can have a huge impact on diversity, equity, and inclusion. In 2013, Venky Nagar, KPMG Professor of Accounting, along with former Michigan Ross professor Feng Li, published accounting research on U.S. firms initiating same-sex domestic partnership benefit policies.
Li and Nagar’s paper “Diversity and Performance,” published in Management Science, tests if corporate policy supporting LGBTQ+ rights frees all employees to bring their authentic selves to work, thus improving org culture and performance. The paper finds that the nearly 300 firms that adopted these policies between 1990 and 2006 saw significant improvement in operating performance relative to an approximate 10% average stock price increase. If an investor had accordingly timed their purchases of these firms, they would have outperformed ninety-five percent of all U.S. professional mutual funds.
The paper’s reasoning was core to the 2015 Amicus Brief filed in support of legalizing same-sex marriage by the law firm Morgan Lewis on behalf of 379 large and small corporate employers ranging from Apple to Zingerman’s in the landmark Supreme Court case Obergefell v. Hodges.
The Personal Development Plan is a simple but impactful idea that has now been utilized by approximately 6,000 BBA alums and current students. At its core, the PDP is an Excel document that helps students plan the requirements to graduate, but its usage and value go far beyond just a requirement planning tool. In 2006, the BBA degree, which had for decades been a two-year degree program, was modified to a three-year structure with a small number of first-year preferred admits. Eight years later, in 2014, the BBA curriculum was modified from a 45 business credit requirement to 58 business credits. The changes to the curriculum meant that students had significantly more time, more flexibility, and more choices in how they progressed through the BBA degree. That flexibility increased even more as we moved to a four-year program in 2017. Advisors developed the PDP as a resource to help students make the most out of this expanded college experience.
In 2014, with the launch of the 58-credit BBA curriculum, a new core course was created, BA 200. As part of BA 200, PDP was introduced as a required component of the class and is now a co-curricular component of BA 100 and BA 102. Each year, the undergraduate advising team works with over 625 new BBA students (first-year students and transfers) so that each student develops an individualized plan for their life as a college student. Ensuring that they are planning requirements is an important part of this, but in developing their plan, students are asked to reflect on their goals for their time in college while developing their PDP. What skills and competencies do they hope to develop while they are here? Are there opportunities they want to take advantage of (study abroad, participation in programs through centers and institutes, minors or dual degrees, club leadership, etc.)? The PDP is a living document that travels with students throughout their four years and becomes a reference point for continued conversations and relationship-building with advisors until graduation. The PDP has had an impact on every single BBA student since the fall of 2014, helping to open their eyes to the rich opportunities at Michigan Ross and giving them a roadmap to their unique journey as a Ross BBA.
The Dare to Dream grant program is an initiative by the Zell Lurie Institute for Entrepreneurial Studies. It provides funding to U-M students interested in exploring and pursuing entrepreneurial ventures.
The student grant program offers three different tracks targeted toward early-stage students looking to develop a business concept to integrate entrepreneurship into their academic studies, students who have already developed a business concept and are seeking to validate and assess the feasibility of their idea, and students who are ready to launch their ventures.
The root of the Great Financial Crisis of 2008-2009 lay in poor-quality residential mortgage loans made by financial institutions. A set of academic research papers established that lenders made poorer quality loans when they anticipated selling the loans to investors rather than continuing to own the loans until they matured. When loans were sold, a complex securitization process led to a large distance between the originator of a mortgage and the final investor in the loans. Amit Seru, PhD '07, and co-authors established in an important series of papers that focused on 1) keeping most characteristics of loans the same, loans that were only marginally easier to securitize had significantly higher default rates than those that were marginally more difficult to securitize, 2) (in work with Professor Uday Rajan) securitized loans, the interest rate (which represents the compensation to investors for bearing the risk of default by the borrower) became an increasingly worse predictor of default in the build-up to the GFC, and 3) information passed on to investors by mortgage securitizers was limited and sometimes outright fraudulent. In another crucial strand of work, Professor Amiyatosh Purnanandam demonstrated that 1) loans held by banks on their own balance sheets had lower default rates than otherwise identical loans sold by banks to investors and 2) (in work with Taylor Begley, PhD '14, and Kuncheng Zheng, PhD '15) even with securitized loans, default rates were lower when the riskiest tranche was held by the lender rather than sold to investors. Collectively, the work done by Ross faculty and PhD alums showed that the ability to securitize mortgage loans undermined the incentives of lenders to the point that low-quality mortgage loans were made, essentially providing the dry timber that fueled the GFC.
Building on his experience as an attorney at the Federal Reserve, the 2020-22 research of Assistant Professor Jeremy Kress has identified critical weaknesses in bank merger oversight and proposed strategies to reinvigorate bank merger enforcement. Kress' work has shown that lax bank merger oversight has harmed consumers, businesses, and the broader financial system. His research has demonstrated that the prevailing approach to bank merger regulation has increased the cost and reduced the availability of consumer credit, inflated the fees that banks charge for basic financial services, limited small business credit availability, and threatened financial stability. Kress' research has pushed bank merger reform onto the policy agenda in Washington, D.C. by serving as a blueprint for legislation introduced by Senator Elizabeth Warren and inspiring an executive order on bank mergers by President Joe Biden. The Department of Justice also invited Kress to lead a joint initiative with the federal banking agencies to rewrite their bank merger policies.
The public corporation in America is vanishing, and more people, from low-income earners to professionals, are doing their work in the so-called “gig economy.” The work of Professors Jerry Davis and Sue Ashford put these two issues on the research agenda of scholarly colleagues. Davis documents the first idea in his book, The Vanishing American Corporation (2016). Although some scholars have suggested that over-regulation might account for this surprising trend, he argues that a more fundamental shift in the economy, enabled by information and communication technologies, was ultimately responsible. By making it cheaper to "buy" rather than "make" inputs (from capital and labor to supplies, manufacturing, and distribution), information and communication technologies have made the parts of an enterprise like a pile of Legos, ready to assemble into a business, scale, and disassemble. This idea explains Nikefication, Uberization, Amazon, and other recent trends in the organization of the U.S. economy, as well as why the same technologies are used differently in different countries, resulting in very different corporate structures. If what Davis says is true, then fewer people will be working in large public corporation settings going forward. This shift may account for the growth in people working independently, some using technologically mediated apps to find and conduct work. Ashford puts the gig economy and gig workers on the agenda of people wanting to understand individuals at work. Her qualitative and quantitative studies identify the challenges faced by those working independently and what they can do to survive and thrive. Challenges include maintaining one’s identity, keeping sufficient income flowing in, staying organized, finding and maintaining work connections, and figuring out how to make working in this manner work over the long run. This research tests a variety of interventions and solicits ideas from individuals working in this manner regarding strategies that make this kind of work-life viable and enlivening.
In 1993, former Michigan Ross finance faculty member Victor Ng, co-authored a paper that is among the top 50 most cited papers in finance. Ng's paper defines the news impact curve, which measures how new information is incorporated into volatility estimates. His paper compares and estimates various new and existing autoregressive conditional heteroskedasticity models, including a partially nonparametric one, with daily Japanese stock return data. New diagnostic tests are presented which emphasize the asymmetry of the volatility response to news. Ng's results suggest that the Glosten, Jagannathan, and Runkle Model is the best parametric model. This path-breaking paper demonstrates the use of a new methodology to show the impact of news on stock prices, probably the most important function of financial markets.
The paper "Value of Information in Capacitated Supply Chains" by Professor Roman Kapuscinski and his co-authors was published in Management Science in 1999. This paper contributed significantly to the understanding of how information sharing impacts the performance of supply chains. Specifically, this paper turned on its head the notion that information would be most valuable in settings where capacity is tight, when the uncertainty of demand is huge, and when the costs of unsatisfying demand are very high. The paper uses careful, rigorous analyses to reveal when information is most valuable and how the value depends on many interrelated factors. Providing an innovative analytical model, Kapuscinski and his colleagues demonstrated when and how the sharing of demand information could remarkably enhance inventory management and order fulfillment for capacity-constrained supply chains. The subsequent literature in operations management has heavily referenced this pioneering work, leading to the development of practical strategies for improving supply chain efficiency through information sharing. Further studies have explored different facets of information sharing in diverse supply chain settings and have considered more complex forms of information, extending the paper's impact in many directions within operations.
Professor David Brophy brought the study of small businesses and private financial markets (now known as alternative, in contrast to publicly traded markets) to Michigan Ross and the state of Michigan before it was recognized as a legitimate area of study at top research universities. This process started in the mid-to-late seventies, and Brophy relentlessly created awareness in Michigan and educated students interested in this space. For over fifty decades, until his recent retirement, Brophy designed and taught all Michigan Ross venture capital and private equity courses.
William Davidson (1922-2009) was a successful global business leader and alum of the University of Michigan. He understood the value of the private sector to empower people around the world.
After the fall of the Berlin Wall, Davidson recognized the value of educating and empowering economic decision-makers in formerly centralized economies with the tools of commercial success. Davidson partnered with U-M to create a unique institute providing consulting and training services to nonprofits, corporations and small businesses in emerging markets with the goals of economic growth and social progress. Since 1992, the William Davidson Institute (WDI) has served as a platform to introduce students to the challenges and opportunities facing firms in low- and middle-income countries.
Over its history, the Institute has supported U-M student teams, totaling more than 1,800 students, who collaborate with business and nonprofit partners to provide analysis and develop solutions built upon the foundation of basic business principles. To ensure ongoing access to current and relevant business education, WDI Publishing also produces and distributes high-quality, cutting-edge business cases and other teaching materials, with more than 700 cases in its collection, reaching approximately 800 universities and institutions globally.
The Institute is also home to NextBillion.net, an online platform for discussing business models and innovations that address development challenges in low- and middle-income countries. The platform reaches more than 25,000 readers a month.
Beginning from seminal efforts by Brian Talbot at the Michigan Business School in the early 1990s, the Tauber Institute for Global Operations was designed to bring business and engineering students together for a world-class education in operations. Students would take classes in both business and engineering and complete team projects with companies. The projects were scoped to incorporate both business and engineering content, addressing important problems that had a VP-level champion at the sponsoring company. The institute was innovative by offering additional training to students beyond operations: leadership training, communications training, and providing students the opportunity to organize conferences, etc. In addition to its impact on students and companies, the Institute has for years served as an important mechanism fueling the technology and operations faculty's relevant, problem-driven research by putting them in touch with practitioners at leading companies around the world. Since its foundation, more than 1,500 graduates have completed the program as Tauber Fellows, there have been 720 summer projects executed at 145 companies, and the Institute was honored in 2012 with the prestigious UPS George D. Smith Prize from INFORMS.
Professor Karl Weick was an iconic founder of the field of organizational behavior. Starting with his seminal book, The Social Psychology of Organizing, which was published in 1969, Weick's ideas had enormous influence, shaping organizational scholarship over the next decades and to this day. He focused on the processes of organizing rather than on organizations per se, suggesting that the insights into those processes give us important leverage to both understand and affect life in organizations. In his book, he introduced the seminal concept of "sense-making," which he defined as "the ongoing retrospective development of plausible images that rationalize what people are doing." Weick's ongoing research focused on how individuals engaged in making meaning and how that meaning-making affected important outcomes in organizations. His book has been cited more than 35,000 times, and his other work on the topic has been cited more than 13,000 times. His pioneering work has instilled a highly influential perspective on the people attempting the organizing work that goes into organizations.
Professor Dudley Maynard Phelps, who was part of the Michigan Business School faculty from 1924-67, studied and wrote about the distinct marketing environments and challenges in markets as diverse as Latin America, Western Europe, and the former Soviet Union, including work for the U.S. State Department. He received recognition for this work from the International Marketing Institute and was president of the American Marketing Association. In the 1980s, Professor Vern Terpstra continued this work and authored the most widely used text on international marketing and other books on the cultural environment of international business, and also published highly impactful research on country-of-origin effects with his PhD student C. Min Han. Terpstra was president of the Academy of International Business in 1970 and was invited to teach at several universities.
In the 1990s, a research team at Michigan Ross, led by Emeritus Professor Claes Fornell, created the American Customer Satisfaction Index. This groundbreaking project included Professors Eugene Anderson and Michael Johnson, as well as Research Scientist Jaesumg Cha and Barbara Everitt, former director of the U.S. Census Bureau.
ACSI represents a paradigm shift in measuring market performance, offering a more complete view of firms, industries, and economies and treats customer satisfaction as a latent construct connecting expectations, perceived quality and perceived value, through customer satisfaction, to customer voice and loyalty. For the past three decades, ACSI has catalyzed a wealth of peer-reviewed research in marketing and business. Empirical studies consistently find ACSI positively associated with profitability, cash flows, stock returns, credit ratings, positive earnings surprises, revenue, gross margins, return on investment, cash flow stability, and operating margins. Greater ACSI is also associated with lower cost of capital, cost of debt, and selling costs. At a macro level, ACSI is found to be predictive of gross domestic product.
Published research by the ACSI team enjoys wide recognition, garnering more than 100,000 citations. Additionally, ACSI-related research has played an outsized role in establishing customer satisfaction as an essential metric within firms' management information systems, priority setting, and key performance indicators.
The marketing faculty at the University of Michigan has, over the decades, made several foundational contributions to the area of consumer behavior. Professor Joseph W. Newman, who was a marketing faculty member at the Michigan Business School from 1949-51 and again from 1965-73, helped greatly through his books and research publications to deepen the impact on the marketing discipline of concepts including economics and decision theory, psychology, sociology, and anthropology, especially through the qualitative research techniques of motivational research. Along with his doctoral students, he published highly impactful research on how consumers gather and use pre-purchase information. He also published research on customer satisfaction and dissatisfaction. For these and other contributions, he was named a fellow of the Association of Consumer Research in 1990, its highest honor. In the decades since, the marketing faculty at Michigan Ross has continued to make many more notable contributions to our understanding of consumer behavior.