Curious about the role that companies can play in helping the global community to recover from COVID-19?, read these recent media stories:
“In the wake of recent disasters, culminating in the COVID-19 pandemic, this is a good time to put the two most fundamental questions regarding the company engagement in societal issues forward again. The first is whether this engagement is good for the company itself. And the second: does it really benefit society? New evidence we have gathered on company giving in the wake of natural disasters offers a resounding but qualified “yes” to both questions”: https://www.conference-board.org/publications/disruption-strikes.
“It was early January in 2020. The coronavirus was already throwing out frightening signs of its potential for economic devastation. General Motors, Honda, Nissan, and other carmakers with plants in the most affected Chinese city of Wuhan had closed their lines. Employees could not work, suppliers had shut down, and customers postponed purchase. By April, the disruption has spread globally and into virtually all industries, from financial services and travel services to construction and technology. Some firms responded by moving into products for testing, combatting, or treating the pandemic. Luxury firms shifted to protective masks, alcoholic-beverage makers to hand sanitizers, and automakers to ventilators. Are these actions economically efficient? And can company engagement in tackling great challenges help societies recover from their disruption?”:https://www.europeanbusinessreview.com/disruption-strikes-youre-in-charge-now-what-when-companies-tackle-great-challenges/.
“As the world reels under the shock created by COVID-19, what role can companies play in leading the recovery from such disasters? Knowledge@Wharton discussed this question with Wharton management professors Michael Useem and Tyler Wry as well as George Washington University’s Luis Ballesteros. Their research indicates that corporations can play a positive role in the recovery from disasters like the this pandemic. The reason is that companies can react faster than traditional relief providers such as governments, multilateral agencies and non-governmental organizations.”: https://knowledge.wharton.upenn.edu/article/coronavirus-contagion-why-companies-should-lead-the-recovery-from-unexpected-disasters/
Thanks for visiting my website! I am an assistant professor at GW (raise high!) and co-director of GLOB~S, The Global Scope Research Lab, a platform for multi-disciplinary collaboration among scholars, business managers, and policymakers to generate science-based evidence on the drivers and consequences of the uncertainty shocks and systemic risks associated with foreign operations. We seek translate such evidence into performance- and social-welfare enhancing solutions.
I hold a PhD in Applied Economics and Management from the Wharton School and degrees from the Massachusetts Institute of Technology and ITAM. Prior to joining academia, I worked with financial derivatives for two commercial banks and with policy instruments to finance catastrophic risk for two multilateral agencies.
My research centers on the individual and institutional drivers of organizational decision making under disruption and the economic consequences of such decisions. I am fascinated by what drives organizations to make specific choices in the face of uncertainty shocks–pandemics such as COVID-19, natural disasters, political unrest, like the Hong Kong protests in 2019, and economic disintegration, like Brexit, among others.
Deciding under uncertainty is at the essence of contemporary business decision making. What organizations do during disruption can be more consequential for their performance and social welfare than strategy under stable conditions. Uncertainty shocks shatter regulations and establish temporal social norms, industries undergo technological change, firms try innovations, and consumers modify their willingness to pay for certain goods. I seek to understand what factors make some decision-makers comparatively efficient to capture and some contexts particularly conducive to generate private benefits and economic value for society at large.
What makes some firms comparatively responsive to shocks that affect social welfare? What are the benefits and costs of taking market (e.g., investment in innovations) and non-market action (e.g., strategic philanthropy) in the face of those shocks? Do societies benefit from these responses? How do they affect the relationship between the firm and key stakeholders? And how experiencing disruption affects the likelihood to start new ventures or engage in innovative behavior? My research agenda centers on similar questions and the fundamental transformation that the business community is now undergoing in attention given to risk and uncertainty at the global level.
Excerpts of recent research findings:
Is there an economic case for the company provision of public goods in the aftermath of disruptions? In the last 20 years, no other entity has grown faster in helping societies financing recovery from large disruptions such as pandemics, terrorist attacks, and natural disasters, than the business organization. This raises the question whether this is economically efficient or whether societies are better off by getting catastrophe funding from traditional public sources.
We took a shot to answer this question. See the video abstract:
And the paper published at the Academy of Management Journal offers quasi-experimental evidence to answer this question: Masters of Disasters? An empirical analysis of how societies benefit from corporate disaster aid.
This study won the Responsible Research in Management Award, IACMR-RRBM.
Do societies benefit more when firms allocate resources in response to national shocks using their own structure or when they use NPOs as resource channels? Firms often supply emergency public goods via non-profit organizations (such as the Red Cross) in countries with high institutional development (such as Japan). Our research suggests that these countries would benefit more if firms implemented their aid with their own resources. Conversely, in countries with low institutional development (such as Haiti) the social benefit is comparatively high when firms channel their aid via NPOs. However, we found the that firms tend to do the opposite. See the video abstract by Strategic Management Journal:
And read the paper: The relative of value of npo-firm experience.
Are firms financially strategic when they engage in non-market behavior? Over 51% of firms supplying public goods in the aftermath of disasters observe losses that are not explained by market operation. We have found that the financial implications of this company pro-social behavior is a function of firms’ preexisting media reputations more than the underlying characteristics of firms’ donations. Moreover, there are reputational spillovers among firms that donate a similar amount than the first donor.
Download the last version of this paper.