Money & Business
Higher Prices=Higher Sales?
Many companies thrive by charging different prices to different customers. The downside is obvious: Victoria's Secret, for one, has been busted by irate consumers for mailing catalogs with higher prices to wealthier ZIP codes. Still, say a group of researchers from MIT's Sloan School of Management and Duke's Fuqua School of Business, customers may actually like getting jerked around occasionally. In How to Attract Customers by Giving Them the Short End of the Stick, appearing in the Journal of Marketing Research, the authors ran six experiments explaining why some companies that snub their consumers see their business flourish. Fastskin, a next-generation swimsuit, was given away free to Olympic teams in 2000, not to the general public, but the tactic generated buzz. Why? "When consumers feel people getting the better deal are experts, they assume it's a higher-quality product," says coauthor Richard Staelin of Fuqua.
No 'Mommy Track' for Daddy
Part-time employment and flextime are two popular avenues out of the traditional workweek. But are they good career moves? Maybe not, say researchers from Arizona State University's W. P. Carey School of Business and Indiana University-Indianapolis. In Alternative Work Arrangements and Perceived Career Success: Evidence From International Public Accounting Firms, appearing in Accounting, Organizations and Society, the authors found that accounting firm managements were much less willing to offer choice assignments to part timers-and fewer managers wanted to work with them. In a twist, the fallout was far more severe for men who chose nontraditional schedules than for women. "These are still looked at as 'mommy tracks,'" says Philip Reckers, an accounting professor at W. P. Carey.
Wanted: Breakthrough Ideas
Fewer than a third of managers at large-cap firms are "highly confident" they can reach growth targets. Eighty percent of chief financial officers say they would ease discretionary spending-neglecting growth-if they were in danger of missing quarterly earnings. This epidemic of short-term thinking is only intensifying, says George Day, a professor of marketing at the University of Pennsylvania's Wharton School. In Closing the Growth Gap: Balancing BIG I and small i Innovation, forthcoming in Harvard Business Review, Day argues that risk-averse managers neglect big and bold ideas that drive growth. Some 14 percent of "substantial innovations" account for 61 percent of all profits. How can managers embrace the BIG I? Day points to GE, where business leaders are required to submit at least three "imagination breakthrough" proposals every year that will create more than $100 million in new growth.
This story appears in the April 23, 2007 print edition of U.S. News & World Report.