Knowledge@Australian School of Business

Managers are role models for smart phone use – and new research from the Australian School of Business shows always-on cultures are hampering productivity, effectively turning workers into "human pinballs" as they bounce from one distraction to the next with no time to think. Setting a poor example for technology use can send employees down the fast path to burnout, with ambitious staffers particularly at risk of over-engagement. While some individuals are turning off communication devices or leaving them in the office, switched-on organisations are pre-emptively tackling the issue.

Executives and managers confront a barrage of distractions from the big picture. As the speed of change and communication in global business generates incessant opportunities and threats, a clear corporate strategy is more vital for long-term business success than ever. Smart organisations know where they are heading and why. Some even divest profitable operations just to stick to their plans. Doug Stace, a strategy expert at the Australian School of Business, highlights why strategy must be a day-to-day concern and not only an annual planning event.

There's no training manual for how to manage multigenerational workforces. Yet a new study from the Australian School of Business covering four generational cohorts in five countries shows significant differences in work values exist between age groups. Members of Generation Y may be technologically adept, but their focus on leisure strongly conflicts with Traditionalists' and Baby Boomers' hard-work ethics. Adaptability is required all round. Some companies are actually leveraging generational differences. And when initiatives are designed to appeal to the "work-is-not-my-life" young ones, often more seasoned colleagues also opt to get with the program.

Not-for-profit organisations often thrive on the strength of volunteers so understanding what drives people to give time and effort free of charge is vital. Typically, volunteering is considered a selfless, empathetic activity, but quite often the "me" factor is at play. A new study from the Australian School of Business shows the motivations of volunteers vary greatly between age groups and indicates the need for not-for-profits (NFPs) to profile their volunteer bases to understand where gaps exist. Self-interested volunteers can work well, as long as the NFP knows how to wrangle them.

The collapse of a number of financial planning firms in recent years has dented consumer confidence in financial advisers, but changes are afoot. The government has tackled conflicts of interest with its Future of Financial Advice reforms and the Australian Securities and Investment Commission has proposed a national exam as an industry qualification. Moves to lift educational requirements for financial planners had already been signalled by the industry. This year, the Australian School of Business (ASB) commenced degree courses in financial planning and has responded to an approach from Tim Steele, director of AMP's Horizons Academy, which trains and licenses that company's financial planners. Under a new agreement, eligible graduates from AMP's Horizons program will be able to gain academic credit towards further study at the ASB. Steele recently spoke with Knowledge@Australian School of Business.

When a quarter of your workforce is heading for the door, it's time for some serious strategic thinking. One Australian organisation is tackling the outflow of thousands of mature-age workers by 2015 with a series of policy changes and initiatives that not only glean vital information for the employer, but also improve the prospects for wannabe retirees. However, a one-size-fits-all policy approach will not be effective in all cases, warn researchers from the Australian School of Business. And collecting data on the intentions of a growing number of mature-age workers and their effect on the workplace is proving complicated.

A new inquiry into the activities of Australia's central bank subsidiary, Securency, has brought the prevalence of bribery in international business dealings back into the spotlight. Demands for "grey money" are commonplace when negotiating deals in many developing nations. While multinational boards may place a high emphasis on ethics, often it's their people on the ground who are left with the risky business of tackling the grey areas to get deals over the line. It's time for a public airing of this cross-cultural no-go zone, says international management professor Andrew Kakabadse. Major global third sector organisations, including the United Nations, need to open the debate so corporate board members can take their heads out of the sand.

Is the end really near for the euro zone as in-fighting escalates among European leaders over strategies to bail out debt-stricken economies and strengthen the banking system? Should Greece default on its debts and quit the European Monetary Union to contain political and social unrest, the contagion effect looks set to be global. Those who believe the Greeks should be left to go it alone fail to understand the wider punishing effects, warns Wolfgang Buehler, a professor at the Australian School of Business who has extensively analysed the crisis. While the fallout may be dire for European unity and international trade, in its bitter lessons are clues for a better way forward.

The global financial crisis delivered new opportunities to re-engineer the workforce with an increased focus on flexibility for both employers and employees. But dangers lurk in the short-term cost-cutting approach embraced by many organisations. The arrangements – and, in some cases, the companies – may not be sustainable. There’s a fine line between organisational agility achieved by varying head counts, and having the right in-house talent and capabilities. Employers need workforce models that can be scaled quickly to meet business demands.

As tax time looms, many Australians are gathering evidence of deductible spending to file a personal income tax return post June 30, with their hopes pinned on receiving even a small sum back. However, in the UK and New Zealand,"wage slaves" and others with comparatively simple tax affairs are spared the need to fill in a return at all.Ten inquiries have looked into simplifying tax returns over the past two decades, but Australia's policymakers have held back. Jason Kerr, a researcher at the Australian School of Business, finds strong evidence for a hybrid system that would entrust taxpayers to do the right thing.

The consuming habits of the baby boomers (those born between 1945 and 1960) have substantially eroded the rate of saving in advanced nations over the past 40 years. Spending up rather than saving up has created an untenable situation. And future generations will almost certainly have a lower standard of living, unless policymakers step in to reverse the trend, according to a new study from the Australian School of Business. With an ageing population accelerating the problem, researchers suggest the "I want it now!" boomers should curb their selfishness and consider the kids.

Plans by the new Coalition Government to abolish Australia's carbon tax put it on a collision course with its Labor predecessor, which opposes the move unless it leads to an emissions trading scheme. Into the fray comes new research from centres at the University of New South Wales. This modelling of investment and operating cost scenarios demonstrates how, by 2030, power generated from renewable energy sources would be a cheaper option than even “clean” gas and coal. The researchers aim to inform a process of decarbonising the electricity industries, but financial market analysts are sceptical that an entrenched reliance on fossil fuels will change without a series of ultra-extreme events.

Australian School of Business professor Peter Swan and colleague Marc-Oliver Fischer have stirred up the business community by refuting the popular view that independent board directors increase firm value. The researchers studied the performance of almost 1000 Australian companies since the ASX introduced voluntary governance guidelines in 2003. Those that followed the board independence recommendations increased CEO and director pay yet under-performed financially. “We estimate these losses conservatively at about A$69 billion over the period 2003-2011,” Swan says. “If the director has no substantial financial interest in the affairs of the company, the only thing they’re going to care about is their own wellbeing.”

When it comes to appreciating the power of big data, the whistle-blowing activities of WikiLeaks and American computer specialist Edward Snowden have seized the headlines. But the collection and manipulation of massive amounts of digital information is increasingly being applied in more legitimate ways, with savvy businesses investing in innovative tools to unlock real-time information about their operations.  Speed is the crucial factor, according to Felix Tan from the Australian School of Business. “If you can analyse and respond to customer and supplier data almost instantaneously, the better informed your business processes will be. That’s the challenge,” Tan says.

Asian nations are facing a dramatic rise in medical costs as they plan for the looming demographic transition to much older populations. Rafal Chomik, from the Centre of Excellence in Population Ageing Research (CEPAR) at the Australian School of Business, says that Asian governments have the fiscal capacity to keep expanding their health systems, but they should heed the successes and failures of reforms in the region and elsewhere to avoid the excessive cost growth seen in the West. Thailand is cited as a good example, and Australia’s strong front line of GPs as well as its pharmaceutical benefits scheme are two initiatives worth emulating, according to CEPAR investigators.

The Chinese market is a glittering prize for foreign companies, but those that hope to prosper need to be aware of a complex labyrinth of government, labour and cultural forces, according to research from Australian School of Business professor Stephen J. Frenkel and PhD candidate Chongxin Yu. Business plans and HR strategies must adapt to the local context and ties with  authorities at all levels need to be maintained. Frenkel suggests that returning Chinese students educated in Australia may offer a new bicultural management model for Western firms because these graduates have the advantage of “knowing their own culture, but also knowing us”.

Companies need to update their products, develop new ones and break into fresh markets. But equally important is the ability to cull projects that aren’t working. Dan Levinthal, the Michael J. Crouch Visiting Professorial Fellow at the Australian School of Business, describes it as a “difficult balance of being tough on resource allocation, but at the same time you can’t make it stigmatising and career-ending” for those whose ideas don't go forward. Controlled micro-failures are part of innovation for start-ups in the tech sector, where the knowledge gained from unsuccessful initiatives is known as “flearning”.

Business professionals are on the move, whether they like it or not. Traditional employers, such as media organisations, the public service, telecommunications companies, accounting firms, banks and universities have all announced redundancy programs during the past 12 months. Job ads are down and unemployment is rising. Some firms are accessing cheaper services offshore.  But what replaces employee commitment to an organisation when stable, full-time jobs are replaced by casual, contract and part-time work? Is “volatile, uncertain, complex and ambiguous” employment the new white-collar reality? Experts from the Australian School of Business and industry weigh in.

Research led by Ronald Masulis, the Macquarie Group Chair in Financial Services at the Australian School of Business, demonstrates a strong causal link between board independence and increased value for shareholders. But there is a potential pitfall in the way board members are chosen. Masulis and co-author Lixiong Guo find that social connections between CEOs and non-executive directors can undermine board independence. “I would encourage corporate boards to voluntarily adopt a fully independent nominating committee, and if they are lacking a nominating committee, to establish one,” says Masulis.

High-frequency trading (HFT) accounts for 27% of Australian stock market turnover.  Its critics describe it as parasitic and providing toxic liquidity. The Australian Securities and Investment Commission says that most concerns about HFT are unfounded. But controversy is never far from the surface. Last month, the Industry Super Network (ISN) cried foul, claiming high-speed traders could cost Australian investors and retirement savers more than $1.5 billion a year. It prompted Australian School of Business finance professor Mike Aitken to point out that HFT is just the latest in a long list of market innovations and that the ISN should get up to speed, by changing stockbrokers if necessary.

Australia's goods and services tax (GST) was born of a political compromise and any discussion of potential changes to its scope and rate remains too sensitive for legislators to touch, particularly during an election year. But there's a growing realisation that GST reform could improve Australia's competitive advantage. So let the debate begin. Neil Warren, a professor of taxation at the Australian School of Business, looks at options and says the GST is a far more efficient tax than many existing levies. KPMG has been testing scenarios. Warren also notes that changing the GST would require all states to cooperate with the Commonwealth, something that's easier said than done.

Many populations across Asia are ageing more rapidly than those in Western countries, yet the development of viable retirement income systems is lagging behind. A new report from the ARC Centre of Excellence in Population Ageing Research (CEPAR) at the Australian School of Business notes that large parts of Asia could benefit from Australian expertise in retirement planning. And providing solutions may offer Australia a new economic boom in financial and insurance services as it assists the region to advance. “Getting a retirement income system right could result in favourable macro-economic rebalancing of growth,” says CEPAR research fellow and report co-author, Rafal Chomik.

Gender diversity in the boardroom has its advantages but there is no business case for female quotas, says Renée Adams, a professor and Commonwealth Bank (CBA) Chair in Finance at the Australian School of Business. Too much emphasis on placing women at the top obscures the systemic difficulties many women face in pursuing and maintaining full-time careers. Policy-makers should concentrate on working from the bottom up to build a talent pipeline. Carolyn Kay, a non-executive director at CBA, sees progress being made in female representation but says more needs to be done, noting that “we are still losing women at senior levels”.

The popularity of crowd-funding continues to explode, but is it just an early stage in the web community's ongoing quest to find ways of circumventing traditional financial service institutions? “The next logical step is crowd investment and crowd equity, where investors take on property rights in the ventures they back,” says Daniel Schlagwein from the Australian School of Business. But there are unresolved legal issues and regulators are hovering as the sums get bigger. With banks already jumping on to the crowd-funding bandwagon, social entrepreneurship may be in danger of losing its cool.

Technological progress is creating a new market reality in advertising with the emergence of a generation of engaged customers, says Liem Viet Ngo, from the Australian School of Business. Traditional television and print advertising is being increasingly supported – and sometimes replaced – by social media marketing and online campaigns where participation and sharing information are the norm. Are these new forms working? Ngo notes that measuring the return on investment of an online campaign remains a challenge for marketers, but one thing is clear: they should stop shouting and start listening. Industry experts suggest that trust is the new black.

According to Markus Groth, an associate professor at the Australian School of Business, employees who have to manage their emotions when dealing with difficult customers are providing emotional labour. It is distinct from physical or cognitive labour and bosses need to take this work and the effects it can have on workers into account. Research into parking officers shows they can be more productive if they display authentic emotions in abusive situations, but other occupations require a different emotional intelligence. There's a need for experiential training and managers should take time to debrief with staff after critical incidents.

South Korea – officially the Republic of Korea – has Asia's fourth-largest economy and is Australia's fourth-largest trading partner, a relationship in which Australia enjoys a significant surplus. Yet Korean was omitted as a priority language in the Australian government's future blueprint, the Asian Century White Paper. Chung-Sok Suh, from the Korea Research Institute at the Australian School of Business, is at the heart of efforts to expand collaboration with our affluent regional neighbour. He notes existing ties but sees plenty of scope for improvement and further opportunities. Companies need to understand that Korean business culture is different to that of Japan or China.

A lack of transparency in the accounts of listed Chinese companies has long sounded warning bells for outside investors, particularly in the context of an insider economy with weak legal enforcement and low investor protection. But China has made great strides in adopting international financial accounting standards during the past 20 years. Researchers from the Australian School of Business have found this progress has improved earnings quality, though not across the board. In some cases, improving quality in one aspect of earnings has been at the cost of sacrificing another. Poor corporate governance is still a pressing concern.

David Gonski, chancellor of the University of New South Wales, sees his leadership strength as an ability to bring people together. But he notes that different people have different leadership skills and different qualities are needed at different times. Although his career has taken him to the pinnacle of business and to key roles for government and cultural organisations, Gonski has never lost sight of the need for personal modesty and respect for others. Or, as it emerges in this conversation with Australian School of Business dean Geoffrey Garrett: the best way to be a good leader is to be a good person.

New research from the Australian School of Business reveals a clear link between flexible work practices and better business results. The study, led by associate professor Julie Cogin, establishes incentives to deploy work-family support (WFS) programs as a source of competitive advantage, particularly to enhance customer-related outcomes. But the business case for WFS demands a genuine engagement with the concept in a receptive corporate culture. A high masculine orientation among senior management can eliminate the benefits. Even the best WFS policies will founder if an organisation lacks the commitment, or values, to promote flexibility in practice.

Australia's federal Opposition intends to repeal carbon pricing laws if it wins this year's election. Yet, when it last held power in 2007, it introduced legislation requiring sizeable polluters to disclose the level of their greenhouse gas (GHG) emissions. Affected organisations have increasingly sought to verify their emissions figures and energy data, creating a niche market in GHG assurance. It's a field that's growing globally. So how is a quality provider selected? Researchers from the Australian School of Business have found that competence, ethics and integrity are key factors, but that specialisation does not, at this stage, command a higher price.

David Gonski, chancellor of the University of New South Wales, sees his leadership strength as an ability to bring people together. But he notes that different people have different leadership skills and different qualities are needed at different times. Although his career has taken him to the pinnacle of business and to key roles for government and cultural organisations, Gonski has never lost sight of the need for personal modesty and respect for others. Or, as it emerges in this conversation with Australian School of Business dean Geoffrey Garrett: the best way to be a good leader is to be a good person.

Global growth in e-commerce is impressive, particularly in Asian countries where online shopping figures can astound. On a single day in 2012, Chinese e-commerce giant Alibaba.com rang up more than US$3 billion in sales. This year, China's e-commerce market is expected to become the world's largest. Felix Tan, from the Australian School of Business, says developed nations can learn from this striking success. Chinese e-commerce operators take a holistic view of business and gain an edge with strategic management practices. Investment in partners creates collaborators and the use of social media engages shoppers for the long term. “The customer experience is very community-based and is extremely rounded, very consolidated,” Tan says.

Climate change is a complex problem. Even bright minds become confused when simultaneously presented with consequences that are potentially catastrophic and the feeling that there’s nothing they can do about it. But there are ways of reducing carbon dioxide in the atmosphere and it's how we think about global warming that seems to be impeding action. John Sterman, a professor of management at the Massachusetts Institute of Technology and Michael J. Crouch Visiting Professor at the Australian School of Business, has been studying why people have difficulty understanding the dynamics of the climate. He sees a way to reframe the issue and has devised simulation tools to assist in forming opinions and policies consistent with people's values. Sterman recently spoke with Knowledge@Australian School of Business.

According to Alana Maurushat from the Cyberspace Law and Policy Centre at the University of New South Wales, computers are the weapon of choice for industrial espionage and hacking incidents are more widespread than reported. The European Commission estimates the worldwide damage to business from cyber crime at US$1 trillion annually. Governments across the globe are stepping up efforts to strengthen cyber security, but will it be enough? Maurushat urges increased public awareness, proper risk analysis and mandatory reporting of certain breaches to share intelligence. She also says the IT industry needs to be held liable for its product quality. Local cyber-detectives warn that under-resourcing leaves Australia vulnerable.

Climate change is a complex problem. Even bright minds become confused when simultaneously presented with consequences that are potentially catastrophic and the feeling that there’s nothing they can do about it. But there are ways of reducing carbon dioxide in the atmosphere and it's how we think about global warming that seems to be impeding action. John Sterman, a professor of management at the Massachusetts Institute of Technology and Michael J. Crouch Visiting Professor at the Australian School of Business, has been studying why people have difficulty understanding the dynamics of the climate. He sees a way to reframe the issue and has devised simulation tools to assist in forming opinions and policies consistent with people's values. Sterman recently spoke with Knowledge@Australian School of Business.

With trends that seem counter-intuitive, predicting the take-up of private health insurance can be tricky. People with private insurance are less likely to be in poor health and have fewer long-term health conditions than those who rely on the public system. But there are methods for modelling choice behaviours and policy-makers would do well to employ them, argues Michael Keane, an economics professor at the Australian School of Business. Attempts to control hospital waiting times through the private health insurance market are unlikely to be successful. Insurance take-up seems driven by the mixed motives of risk aversion, cognitive ability and income.

In a study of particular relevance to managers, Andreas Ortmann, a professor of experimental and behavioural economics at the Australian School of Business, has found that people at the lower end of the competence spectrum in any environment tend to over-estimate their talents in comparison to those around them. They are over-confident and unaware of it, a potentially disastrous combination in team leaders. But Ortmann says that with the right feedback, all but the least competent people can be calibrated to recognise their actual skills level and perform better as a consequence. And even the least competent can be helped, though it may take a lot longer.

The sustainability of an organisation, particularly in times of economic turmoil, is often seen as directly related to its ability to innovate and implement change. But how organisations perceive and react to failure – their failure orientation – is also integral to ongoing viability. According to Australian School of Business associate professor Gavin Schwarz, firms that recognise failure as a stabilising force and as a legitimate aspect of organisational survival will find this perspective can have a positive influence on the overall behaviour of their organisations and, with it, future prospects.

The global popularity of mobile phones is being harnessed in the delivery of healthcare services (mHealth) to remote locations with scarce resources. In Bangladesh, mHealth is used for communicating with patients and doctors, delivering expert advice, collecting information in public health campaigns, even self-testing by patients. Pradeep Ray, a professor of information technology at the Australian School of Business, says Bangladesh is leading the world in providing mHealth-based services and that research he's leading into community acceptance there will benefit other developing countries. Meanwhile, in the developed world, mHealth can be a cost-effective tool in the allocation of stretched health budgets trying to cope with an ageing population and chronic conditions.

The collapse of a number of financial planning firms in recent years has dented consumer confidence in financial advisers, but changes are afoot. The government has tackled conflicts of interest with its Future of Financial Advice reforms and the Australian Securities and Investment Commission has proposed a national exam as an industry qualification. Moves to lift educational requirements for financial planners had already been signalled by the industry. This year, the Australian School of Business (ASB) commenced degree courses in financial planning and has responded to an approach from Tim Steele, director of AMP's Horizons Academy, which trains and licenses that company's financial planners. Under a new agreement, eligible graduates from AMP's Horizons program will be able to gain academic credit towards further study at the ASB. Steele recently spoke with Knowledge@Australian School of Business.

According to Larry Dwyer from the Australian School of Business, the recent lean years for Australian tourism can be seen as Dutch Disease, a term coined during the 1970s when the discovery of gas deposits in The Netherlands led to an appreciation of the domestic currency at the expense of other local industries. Growth is returning to Australian tourism with more visitors coming from China than from the traditional market of Britain and resumed interest from the US. But Dwyer notes that a slowdown in investment has led to a lack of innovation, resulting in a tired product. Australia is one of the world's most expensive destinations, but is it really geared up to deliver quality experiences for visitors?

Dan Levinthal is a professor of management at the Wharton School at the University of Pennsylvania. He is also the Michael Crouch Visiting Professorial Fellow at the Australian School of Business where he will be giving a series of talks on innovation and the experimenting organisation. Levinthal says that companies seeking to foster new possibilities need a mix of discipline and some element of tolerance for at least partial failure. It is about balancing exploration and exploitation. Levinthal recently spoke with Knowledge@Australian School of Business.

With declining revenues and competition from online resources and social media, traditional newspapers and even digital news sites are in transition, according to new research from the Australian School of Business. The forms that news sources will take in the future is as yet unknown, but the ability to track user trends online will certainly shape their evolution and the survival of conventional newspapers is not assured. Local papers and specialist sites are expected to survive, but how will the civic role of news reporting be funded?

Dan Levinthal is a professor of management at the Wharton School at the University of Pennsylvania. He is also the Michael Crouch Visiting Professorial Fellow at the Australian School of Business where he will be giving a series of talks on innovation and the experimenting organisation. Levinthal says that companies seeking to foster new possibilities need a mix of discipline and some element of tolerance for at least partial failure. It is about balancing exploration and exploitation. Levinthal recently spoke with Knowledge@Australian School of Business.

What does it take to be innovative in a changing global economy? That was a key question posed at the 35th-anniversary conference of the Australian Graduate School of Management. A highlight of the conference was three business leaders – Gerhard Vorster, chief strategy officer at Deloitte Australia and Asia Pacific; Andrew Stevens, managing director of IBM Australia and New Zealand; and George Frazis, CEO of St George Banking Group - sharing their insights into embracing the challenges of innovation, now and into the future.

The Australian government plans to link its fixed-priced system for tackling climate change to the emissions trading scheme (ETS) of the European Union (EU). Meanwhile, the Europeans are wondering whether a straight and predictable carbon tax such as Australia's would not have been more efficient for them in the first place. The EU's floating carbon price has fallen to levels where it's more profitable for some businesses to keep polluting than to invest in green technology and it's apparent that too many emissions rights have been issued. Regina Betz, joint director at the Centre for Energy and Environmental Markets at the Australian School of Business, says an effective ETS needs to include a floor price for carbon to limit intervention from politicians and thereby provide certainty for business.

What entrepreneur wouldn't dream of turning a single store into a thriving chain of outlets? Few succeed, but someone who has is Catherine Harris, chair of Harris Farm Markets. With her husband David as CEO, Catherine co-founded the business in 1972 with a small fruit and vegetable shop in the western Sydney suburb of Villawood. It has since grown into an operation with a chain of 22 stores and three butchers across the state of New South Wales and more than 1000 employees. Harris Farm Markets was a trailblazer in being the first Australian fresh produce business to serve its customers in the style of a supermarket. From the start, the family-run concern has bought its goods from the Sydney Markets at Flemington, near the site of the 2000 Olympics. Harris Farm Markets continues to be based there. Catherine Harris has maintained a close association with the University of New South Wales since completing her degree in the late 1960s at what was then the faculty of commerce, which is now the Australian School of Business. An Officer of the Order of Australia, Catherine has held other prominent directorships and sat on a number of boards. She is currently a commissioner of the Australian Rugby League and Honorary Consul General for Bhutan.

Bold and creative maverick leaders tend to deliver great innovations and breakthroughs. At the same time, they are highly disruptive, disturbing to work for and, by nature, definitely not team players. In business, it seems we can’t live with them and can’t live without them, as many who encountered Apple founder, Steve Jobs, have attested. New research from the Australian School of Business delves into the personality traits and risk-taking behaviour of mavericks and finds the case for understanding the visionary nonconformist, while also carefully managing those within their influence.

Corporate risk management has traditionally focused on mitigating the impact of external factors over which a company has no control. But what about internal factors? Australian School of Business professor Lex Donaldson has developed Organisational Portfolio Analysis (OPA), a new approach that identifies the risks within a company's individual business units and reveals how their fluctuations interact with overall company risk and performance. OPA can deliver fresh insights into the dynamics and behaviour of a corporation. By better understanding sources of corporate risk, they can be managed and used to drive profits.