- IBS Curriculum
- Innovation and the Value of Privacy
- Financial Innovation: A Risky Business
- Diversity and Inclusion for All
- Growth for Entrepreneurs
- Can My Company Change?
- Business and Politics
- Small Worlds of Governance
- Bolder Policies for Diversity?
- Governance and Compensation
- The Quantitative Revolution
- Inclusive Leadership
- Preventing the Next Crisis
- Universities and Women
Choices and tradeoffs, in a variety of forms, are manifest in business. Recognizing that, sessions developed under the aegis of the Sanford C. Bernstein & Co. Center for Leadership and Ethics provide the framework needed to thoughtfully address these issues. The topics are integrated throughout the School’s core curriculum.
A sampling of representative topics is listed below:
Topics covered: How should corporations be organized at the very top? How can effective corporate governance help firms manage their risks and guard their reputations? What can the board of directors do specifically to help the company take the appropriate steps to benefit its stakeholders in the long run?
Corporations are run by senior management, who answer to their board of directors. There is significant variation across companies in regards to corporate governance, which is how the board is organized and operates and how it interacts with senior management. Students learn how the board is constituted, and how it performs its role. The class discusses how and why the board delegates authority to its committees, to the CEO and the executive team, allowing the company to carry out its strategy. The board of directors faces a number of duties based on law, best practice, and the demands of shareholders and other stakeholders. But this leaves a great deal of discretion. To maximize shareholder value over the long run, the board needs to operate ethically, with directors exercising care in their duties, upholding high standards of integrity, and acting fairly. In addition, the actions of a board will directly affect the culture of the corporation. A board is responsible for determining and communicating the values and standards of the business, and it must ensure that the firm’s policies, procedures, and controls advance the long-term interests of the corporation.
Earnings management: What does GAAP allow? Should earnings be managed within GAAP? What are the pressures to do so (e.g., analysts’ forecasts)? Where are the boundaries?
Financial statements are meant to enable the reader to evaluate the performance of an enterprise, analyze its cash flows, and assess its financial position. Recently, widely publicized cases of misleading statements, which were nevertheless attested as to their fairness by outside auditors, resulted in improper revenue recognition, overstatement of income, and misrepresentation of financial position. There is now a growing awareness of the importance of honest reporting as the foundation for investors’ confidence in the integrity and proper functioning of the financial markets.
This course examines the generally accepted accounting principles underlying the financial statements, their implementation in practice and the role of the independent auditors. Note is also made of the limitations of financial reports, their evolution in response to changing business conditions, current accounting controversies, and the constraints that limit the freedom and influence the course of action of rule makers and regulators.
Global income inequality: What drives the majority of the poverty in the developing world? Are there any downsides to giving more foreign aid? Why has income inequality increased so much? Is there anything that the government or businesses can do about it? What are the pros and cons of making the tax code more progressive?
The core global economic environment class teaches students to become intelligent consumers and users of macroeconomic news. Students learn how to GDP, investment, unemployment, interest rates, and exchange rates in the global economy relate to one another and affect the business decisions of firms. Some of the questions that we examine include: Why are some countries doing so much better than others? What leads to persistent inflation and how can hyperinflation arise? What are the causes and consequences of global imbalances? What
determines exchange rates? What causes business cycles and what is the role of monetary policy?
If someone is going to be a leader in a corporation they have to be informed about the global macroeconomy. A leader must understand what policymakers say and how it impacts their decisions. A leader must know, not only how to make sense of the economy today, but also how to detect and anticipate macroeconomic trends in order to make better business decisions going forward.
Leadership and values: Learn the art of persuasion; Integration of ethics and leadership
A kidney must be allocated to one of eight worthy transplant candidates. Students first make an individual decision, weighing tradeoffs between values such as medical efficacy, consistency with policy, deservingness according to past deeds, and potential future social benefits. Then students in teams make presentations for a particular candidate, framing their arguments in terms of relevant values. Finally, we discuss the challenges leaders face in allocating scarce resources while maintaining perceived justice, emphasizing behaviors and policies that create procedural justice.
Topics addressed: The Limits of Markets
Using the lens of economics, students in this course learn to think systematically and strategically about critical management issues concerning consumer demand, costs, pricing, market competition, and organizational incentives. This course differs from undergraduate microeconomics in its emphasis on how economic principles apply to real-world managerial decisions, with a reliance on quantitative data analyses.
While economic theory presents strong arguments in favor of using market mechanisms for the allocation of goods and services, a strict reliance on market forces raises important issues of leadership and ethics. For example, in situations of a temporary spike in consumer demand, such as after a natural disaster, market forces can lead to prices for goods and services that society regards as unfair or inappropriate. Should society’s views trump the efficiency of the marketplace? Should businesses have faith that the market will lead to the best ultimate outcomes, or should they support the use of non-market mechanisms?
Students learn about situations when perceptions of fairness differ from the dictates of the marketplace and the consequences of market interventions (e.g. price controls, quantity restrictions) to address these concerns. Through in-class discussion, students become more cognizant of inherent limitations in markets, the issues involved in departing from market equilibrium, and how to exercise values-based leadership in weighing these tradeoffs.
Topics addressed: Effect of media violence on crime. Statistical evidence.
Students review a paper by Dahl and Della-Vigna (QJE) that tried to address the question of whether movie violence increases violent crime. The goal is to explore if movie violence affects crime incidence. There has been increasing press coverage that violent movies and violent video games may be linked to aggression and possibly violent crime. This may have implications to policy. How would one go about answering such a question, and how one can quantify a causal relationship between violent movies and/or games and aggression and crime.
Topics covered: Fairness in pricing; should elements of “fairness” enter a firm’s pricing decision? If so, how would managers determine a fair price? What are the legal boundaries?
Marketing provides tools and frameworks that ultimately allow managers to extract value from customers, i.e., it empowers managers to persuade and influence customers. Consequently, the marketing core is a natural context for discussing ethical issues. Two of the 4 P’s of marketing, Price and Promotion, are particular relevant to ethics. We discuss ethical issues formally in the context of Pricing, in a student-led fashion. Several learning teams make short presentations related to interesting pricing strategies that have ethical ramifications. Each student team identifies and presents its own case study, provides a critical analysis, and highlights some learning.
Topics covered: How to effectively reduce waste in the production of goods and delivery of services; how to set up business operations to profitably serve, in a cost efficient manner, a low-income population; how a manager should provide a high quality environment if s/he requires high quality products from his/her workers; the connection between employee empowerment and quality/productivity outcomes; more broadly, the importance of corporate culture in achieving operational excellence.
Operations Management is the design and management of the processes that transform inputs into finished goods or services. Operations is one of the primary functions of a firm and is the basis for the production and delivery of the goods and services provided by the firm. This course provides a foundation for understanding and managing the operations of a firm. Our objective by the end of the course is to provide you with the basic skills necessary to critically analyze a firm's operating performance and practices. Unlike many courses in the core, which tend to treat the firm as a "black box", we will be primarily concerned with "opening up" the black box and discovering what makes a firm "tick"—or, for that matter, "stop ticking."
The course emphasizes how a smart operational strategy can implement a firm’s business strategy, in a sustainable manner, efficiently using the resources available. This can have a profound impact in both profit and nonprofit businesses, including those with tremendous societal impact, such as healthcare delivery services.
Topics covered: Do firms have a responsibility to provide drugs to people in need regardless of direct profitability? How might firms respond to the ‘credibility problem’ that a very close integration of CSR activities and firm strategy may hurt their positioning with customers?
This session helps students identify the conditions under which “Doing Good” (i.e., corporate social responsibility (CSR)) can provide firms with a competitive advantage. Firms may seek to capture private benefits by positively influencing public opinion and thereby regulatory and political institutions through 'doing good' activities (non-market competition). Building on the concept of tradeoffs in strategy formulation, students weigh the benefits and costs of different CSR choices a firm can make.
Topics addressed: Can a firm use any data it collects? What if such data, even if collected locally in the stores a firm runs, leads to effective predictions on private information? Business analytics refers to the ways in which enterprises such as businesses, nonprofits, and governments can use data to gain insights and make better decisions.
The ability to use data effectively to drive rapid, precise and profitable decisions has been a critical strategic advantage for companies as diverse as WalMart, Google, Capital One, and Disney in a variety of functions. For example, Capital One uses sophisticated analytic capabilities to match credit card offerings to customers more accurately than their competition. WalMart uses analytics to monitor and update its inventory in a way that allows it to serve its customers at an exceptionally low cost. In addition, many current and recent startups such as Palantir and Splunk are based on the application of analytics to large data bases. With the increasing availability of broad and deep sources of information — so-called “Big Data” — business analytics are becoming an even more critical capability for enterprises of all types and all sizes. With such capabilities, a new set of questions pertaining to privacy arises. When a firm targets a customer based on data it collects to provide appropriate ads or offers, is this a win-win proposition or an invasion of privacy? We have three goals in this course. The first is to help students think critically about data and the analyses based on those data — whether conducted by the student or someone else. The second is to enable students to identify opportunities for capturing value using business analytics. The third is to help students estimate the value captured using business analytics to address an opportunity.