Being on the Map
Gauri Subramani, assistant professor of management, and coauthors explored the extent to which small businesses maintain an online presence and estimate the impact of digital representation on business performance. A surprising number of small businesses remain offline; they saw that roughly 18 percent of bars and restaurants do not have a listing on Yelp, even though creating one is free. They found that having an online presence increases revenues from 5-10%, however, these effects vary substantially across establishments. They also learned that businesses that struggle to develop a reputation (e.g. non-chains or those in tourist areas) and those with a higher quality of product (e.g. larger restaurants or those with good reviews) experience larger increases after being listed. This work highlights the critical importance of maintaining a digital presence, not as a mere option but as a strategic imperative.
On Target
From sales quotas to emission-reduction goals, organizations run on targets. However, Jacob Zureich, assistant professor of accounting at Lehigh Business, showed that targets may have downsides for employee decision-making. In an experiment, he found that targets inhibit on-the-job learning because employees judge the success of their strategies based largely on whether performance exceeds the target, overlooking the magnitude of success or failure. For instance, a sales strategy exceeding the target by 50% should be considered more effective than one surpassing it by 1%, yet employees often view both outcomes similarly. Such binary thinking discards valuable information, ultimately inhibiting the continual learning organizations need to thrive in dynamic environments. Interestingly, the study also finds that harder targets reduce “binary thinking,” causing employees to experiment too much with different strategies.
Advantage for Fintech Startups
Qianqian Yu, assistant professor of finance at Lehigh Business, and her coauthors examined the impact of corporate direct investments in fintech startups on both startup success and investor performance. Their research revealed that such investments lead to a higher likelihood of successful market exits, increased innovation output and quality, and a greater influx of top-tier investors. The study identified two key mechanisms behind these performance gains for fintech startups: the formation of strategic alliances between corporate investors and startups, and improved investor-led monitoring. Notably, the analysis also showed that corporate investors in the financial sector benefit directly from these investments through enhanced product market performance and stronger equity valuations—an effect not observed among investors from the non-financial sector. Monetary Policy Models During meetings of the Open Markets Committee, the Federal Reserve Board establishes the target federal funds rate without contemporaneous inflation or output data, occasionally even lacking data from the preceding month. While they rely on projections of a highly specialized team of forecasters, this situation generates an information asymmetry between policymakers and analysts, who utilize revised data years later to assess the effects of monetary policy. Fabio Gómez-Rodríguez, assistant professor of economics, is working on a project that introduces a model to address this information disparity, demonstrating that the effects of monetary policy are frequently underestimated.
Fairness-Efficiency Symbiosis
Companies regularly make decisions that deeply affect the well-being of employees and customers. The desire to be ’fair’ can seem to conflict with the need for efficiency, creating ethical dilemmas for business leaders. But what if fairness was also the most effective business strategy? Research from David Rea, assistant professor in the DATA department at Lehigh Business, investigated this question by distinguishing between two common types of fairness principles: equality (the same for everyone) and equity (outcomes based on contribution). His findings provide a clear guide: while aiming for strict equality often hurts performance, making a system more equitable can make it more efficient under readily defined conditions, showing that when carefully applied, the pursuit of fairness can be a powerful organizational advantage.
Strategically Startling
In a world where attention is scarce, surprise can be a marketer’s secret weapon. Beibei Dong, professor of marketing at Lehigh Business, and her coauthors investigated how brands can strategically incorporate surprise marketing—a blend of unexpected moments and uncertainty—to evoke powerful emotions that shape customer decisions and loyalty. Their study dove deeply into the how and when of surprise marketing, revealing four emotional pathways—excitement, anxiety, gratitude, and skepticism—that can influence campaign success. They also identified key factors managers can control to amplify positive effects and mitigate negative ones. The study gives marketers actionable insights for designing impactful surprises across customer touchpoints and turning uncertainty into opportunity.