September 2006

In this issue

Fisher Working Paper Series debuts on

Scholar Snapshot: Croxton, Zinn take inventory with new network design model

Powerful CEO = higher employee salaries

Founder knows best in the eyes of investors

  Fisher College of Business
Fisher Working Paper Series
debuts on

Working papers and unpublished scholarly articles developed by Ohio State business faculty will be made available to the academic community when the “Fisher Working Paper Series” debuts on the Social Sciences Research Network ( this week.

SSRN is an organization that collects and disseminates cutting-edge, pre-publication scholarly research in a variety of disciplines including business. Last April, SSRN ranked Fisher 16th among business schools highlighting the faculty’s influential research.

The Fisher page hosted on will make faculty working papers available for easy download. will also distribute a periodic e-mail newsletter to notify network members of new research papers by Fisher faculty.

“The intellectual productivity of our faculty is extraordinary, particularly when you take into account that our professors still devote a significant amount of time to teaching and advising students,” said Fisher Dean Joseph A. Alutto. “But what is even more impressive is the substantial impact that our faculty scholarship is having on the greater research community and its application in the business world.” Read More »

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Scholar Spotlight
Croxton, Zinn take inventory of
network design with new model

Walter Zinn

Taking stock of inventory costs could save corporations millions of dollars when it comes to mapping out their logistics networks.

For one national retailer, this could mean savings of up to 10 percent or $4.5 million annually by factoring inventory costs into the design of their distribution network, according to research by Keely Croxton, associate professor of logistics, and Walter Zinn, professor of logistics.

Companies frequently use optimization models to find the delicate balance between transportation costs and fixed warehouse costs, but these traditional models do not account for the cost of holding inventory in the network. However, having more stocking locations increases the inventory requirements, so inventory can impact what an optimal network would look like. By using traditional models that don’t include inventory costs, companies might be settling for a sub-optimal distribution network. This research aimed to develop a model that included inventory costs and examine the impact that this would have on the optimal network.

Calculating inventory costs into network design generally reduced the number of warehouses when compared to a model based only on transportation and fixed warehouse costs, Croxton said. Inventory costs are reduced because the number of stocking locations is also reduced. Read More »

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Workers get paid more when
they work for powerful CEOs

Henrik Cronqvist
For workers at publicly held companies, it literally pays to have a very powerful boss.

A new study found that entrenched CEOs - those who have more control rights in their company than all other shareholders combined -- pay their workers about 6 percent more than other managers do. That equals about $2,200 in higher wages per year for these employees.

“Entrenched CEOs give higher pay, not only to themselves, but also to the firm's other employees, such as its janitors or engineers,” said Henrik Cronqvist, co-author of the study and assistant professor of finance.

The Financial Management Association International (FMA) awarded Cronqvist and his co-authors, the Best Conference Paper at the group’s European Conference in Stockholm, Sweden in June. Read More »

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Founder knows best in the eyes of investors

Rüdiger Fahlenbrach

Companies that are still run by the men and women who started them tend to perform better in the stock market than do other firms, a new study suggests.

Firms with founder-CEOs outperformed other companies in the stock market by 8.3 percent from 1993 to 2002, said Rüdiger Fahlenbrach, author of the study and assistant professor of finance.

“Entrepreneurs who started a company and developed it through years of hard work often consider that their life's achievement," he said. “They approach their company differently than any successor could, and that is reflected in how the company is valued.”

Fahlenbrach studied 2,327 large U.S. firms from 1993 to 2002. He compared those companies still run by their founders – 11 percent of the total – to all the remaining firms. The founder-CEO firms contain some of the largest and most successful firms of the 1990s, including Berkshire Hathaway, Comcast, Dell, Home Depot, Microsoft and Toys "R" Us. Read More »

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News Briefs

Greenberg honored by psychology group
Jerald Greenberg, professor of management and human resources, has received the Distinguished Scientific Contributions Award from the Society of Industrial and Organizational Psychology.

One of SIOP’s highest honors, it recognizes long-time and significant scientific advancements in the field of industrial-organizational psychology.

Greenberg is a pioneer in the field of organizational justice and has demonstrated the concept of fairness to management practices. In fact, he is recognized as the leading researcher in organizational justice and nearly all scholarly articles on the subject refer to his work.

Young named
journal editor

Richard Young, director of the honors accounting program, has accepted an offer to be the next editor of the "Journal of Management Accounting Research." Young, who previously served on the journal’s editorial board, will succeed Joan Luft of Michigan State University as the editor.

EJOR recognizes Benton, Current article as most influential
When professors W.C. Benton and John Current set out to conduct a review on the industrial vendor selection process neither expected that the 1991 article would eventually pop up all around the world.

The article, “Vendor selection criteria and methods,” surprised the authors again late last year when it was selected as one of the 30 most influential articles ever published in the “European Journal of Operational Research.”

Selection to the influential list was determined largely by number of times an article was cited and the time period it was written in. The article has been citied 96 times, Current said.

Allenby appointed
to journal staff

Greg Allenby, the Helen C. Kurtz Chair in Marketing, has been selected as an associate editor for the "Journal of Marketing Research." He will assist the quarterly journal in the area of Bayesian statistics and economics.

News Briefs

Neeli Bendapudi, associate professor of marketing, had her research on the convenience store chain, Wawa, featured in The New York Times Magazine. She told the magazine, Wawa has managed to create a cult following among customers because they provide "outstanding-employee interactions" by careful hiring and training practices.

Jay Anand
, associate professor of corporate strategy and international business, was quoted in USA Today, on Aramark's $6.3 billion decision to go private. Anand told the paper that investors are pouring money into private equity because they have performed at a much higher rate than the stock market. Read the article»

Oded Shenkar
, professor of management and human resources, was quoted in a Bloomberg story on the Wal-Mart ’s decision to allow Chinese workers to organize. Shenkar told the news service Wal-Mart probably allowed its 23,000 Chinese workers to unionize at the desire of the government as a way to help expansion efforts. Read the article»

J. Richard Dietrich
, chair of the Accounting and MIS program, was quoted in an Associated Press story on an Securities and Exchange Commission probe into the alleged accounting of stock options that resulted in the first charges against a pair of former Brocade Communications Systems execs. Dietrich told the news service the SEC would likely go after all corporations that enganged in back dating of stocks and could a great deal of anguish in the process.

Knowledge Link is published monthly to showcase the research produced by Fisher College of Business faculty members.

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