Research Roundup: August 2024

Dive into our monthly Research Roundup, showcasing the latest insights from the business education community to keep you informed of new and noteworthy industry trends. Here are this month’s selections:

Combining Impact and Income in Social Ventures

• Researchers: Lien De Cuyper, University of Amsterdam; Bart Clarysse, ETH Zurich; Mike Wright, Imperial College London (deceased)
• Output: “Doing Good While Making Profits: A Typology of Business Models for Social Ventures,” Wiley, 2024
• Overview: As social impact and profitability become increasingly intertwined, it is essential to understand the strategic choices that drive the success of social ventures. This research develops a framework that categorizes business model choices for social ventures, focusing on how these ventures balance social impact with economic value.
  
  The researchers identified three key decisions for social ventures: choosing who their primary beneficiaries are, determining whether their customers are also their beneficiaries, and deciding how to incorporate social purpose into their products or services. These choices informed the creation of a typology consisting of four distinct business models for social ventures, illustrated through case studies from seven diverse organizations.
• Findings: The research categorizes social ventures into four distinct types—Social Stimulators, Social Providers, Social Producers, and Social Intermediaries—based on their approaches to beneficiaries, customer-beneficiary overlap, and social value integration. Ventures that align social and commercial goals effectively not only enhance their sustainability but also maximize their impact. By consciously integrating these objectives, social ventures can achieve financial stability while advancing their social missions, addressing critical issues like poverty, education, and sustainability.
  
  Business leaders are encouraged to leverage this framework to evaluate their own organizations' alignment of social and economic goals, innovate their value propositions, and foster partnerships that amplify social impact. Findings suggest that this is an opportune time for businesses to reevaluate their strategies, aiming to achieve both profitability and meaningful societal change.

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Elevating Error Detection in AI Outputs

• Researchers: Renee Richardson Gosline, MIT; Yunhao Zhang, Psychology of Technology Institute; Paul Daugherty, Accenture; Arnab Chakraborty, Accenture; Philippe Roussiere, Accenture; Patrick Connolly, Accenture
• Output: “Nudge Users to Catch Generative AI Errors,” MIT Sloan Review, 2024
• Overview: In today's fast-paced digital landscape, generative AI models like ChatGPT are becoming integral to business operations. However, concerns about the accuracy and reliability of AI-generated content persist. Addressing this challenge, new research explores how introducing intentional "friction"—such as prompts for human review—can enhance the quality of AI outputs.
  
  Through a field experiment involving business research professionals, the study assessed a tool designed to highlight potential errors in AI-generated content. The goal was to evaluate whether these interventions could help users more effectively identify inaccuracies and omissions without significantly slowing down their work.
• Findings: The study found that participants using the error-highlighting tool identified significantly more errors and omissions, improving accuracy but at the cost of increased task completion times, especially in the high-friction group. The medium-friction condition, which used two types of error highlighting, struck the best balance between improved accuracy and minimal time increase.
  
  Across all conditions, participants' outputs closely mirrored the AI-generated content, underscoring the need for well-crafted prompts and human oversight. Business leaders should create their own error-highlighting tools with moderate friction to improve AI accuracy while maintaining efficiency. This approach reduces overreliance on AI and enhances decision-making, helping businesses stay competitive in the digital landscape.

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Unlocking Employee Satisfaction Through Hybrid Work

• Researchers: Nicholas Bloom, Stanford University; Ruobing Han, The Chinese University of Hong Kong, Shenzhen; James Liang, Trip.com
• Output: “Hybrid Working From Home Improves Retention Without Damaging Performance,” Nature, 2024
• Overview: As the future of work evolves, finding effective ways to keep employees satisfied and productive has become crucial for success. This study aimed to explore the impact of hybrid work-from-home (WFH) arrangements on employee retention and performance, a growing concern for business leaders.
  
  Over a six-month period, 1,612 university-educated employees from a large Chinese technology firm participated in a randomized control trial. The trial compared employees who worked from home two days per week with those who worked entirely from the office. The main goal was to determine whether a hybrid WFH model could maintain or even enhance productivity, while also improving job satisfaction and reducing turnover.
• Findings: The study revealed that the hybrid WFH model significantly reduced turnover rates, particularly among non-managers and women with long commutes, and increased overall job satisfaction.
  
  Initially skeptical about the impact on productivity, managers became more supportive after the trial, aligning with the positive perceptions of non-managers. Employees in the hybrid group reported improved work-life balance, were more likely to recommend their company, and had a lower intention of leaving. Importantly, there was no difference in promotion rates between those working hybrid and those fully in office, easing concerns about remote work limiting career growth.
  
  These findings suggest that a hybrid WFH approach can enhance employee retention, boost satisfaction, and lower turnover costs. Business leaders are encouraged to adopt hybrid models, ensure broad participation, and leverage real-world experimentation to refine work strategies, fostering a more flexible and productive workforce.

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Following Gut Feelings in Business Strategy

• Researchers: Neil Gareth Shepherd, Lancaster University; Bowen Lou, Lanchester University; John Maynard Rudd, University of Warwick
• Output: “Going With the Gut: Exploring Top Management Team Intuition in Strategic Decision-Making,” Journal of Business Research, 2024
• Overview: In today's fast-paced business environment, leaders need to make quick, informed decisions. This research explores how top management teams use intuition in strategic decision-making, particularly in complex and uncertain situations. The study sought to identify the factors that trigger and enhance the effectiveness of intuitive decisions.
  
  Through interviews with top managers from 27 U.K.-based firms, focusing on recent strategic decisions where intuition played a role, the research examines both successful and unsuccessful outcomes. The findings provide insights into when and why intuition is used in strategic processes and how it can be effectively combined with rational analysis.
• Findings: The research suggests that executives with high self-confidence and strong self-evaluations are more likely to rely on intuition, particularly in complex and uncertain situations. Teams that demonstrate diverse cognitive styles and a distributed decision-making approach seem to benefit more from intuitive decision-making, especially in fast-paced, high-pressure environments.
  
  However, leaders should avoid over-relying on intuition, which can lead to setbacks in unfamiliar scenarios. While rational decision-making tends to be more effective in stable environments, this approach may struggle in dynamic settings due to information overload and the demand for rapid decisions.
  
  To enhance decision-making skills, the study encourages leaders to develop their intuitive judgment, particularly under pressure, while also learning to balance it with rational analysis. Organizations are encouraged to foster cognitive diversity within teams and provide continuous feedback to help leaders refine their decision-making abilities and adapt to both familiar and new challenges effectively.

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How Virtual Enhancements Drive Real-World Sales

• Researchers: Charlotte Soderstrom, Forte Digital; Patrick Mikalef, Norwegian University of Science and Technology; Andreas Dypvik Landmark, SINTEF Digital; Shivam Gupta, NEOMA Business School
• Output: “Augmented Reality (AR) Marketing and Consumer Responses: A Study of Cue-Utilization and Habituation,” Journal of Business Research, 2024
• Overview: As augmented reality (AR) becomes more popular in e-commerce, business leaders will need to understand its impact on purchasing decisions. This research examines how AR applications, specifically the IKEA Place app, influence consumer behavior.
  
  The study focuses on what drives purchase intentions among two different user groups—first-time users and those who regularly use the app. Through a survey of 394 U.S. participants who have used the IKEA Place app for shopping home furnishings, the study identifies key factors that influence these decisions.
• Findings: The research reveals distinct behaviors between first-time and habitual users of the IKEA Place app. First-time users are captivated by the vividness and entertainment value of the AR experience, which makes the shopping process engaging and informative. They are particularly drawn to detailed product information, which enhances their involvement. In contrast, habitual users find more value in practical AR features, like visualizing furniture within their living spaces and receiving personalized recommendations, which build their confidence in product choices.
  
  This shift from seeking novelty and information to preferring personalized, practical applications suggests that repeated interactions with AR foster deeper satisfaction and stronger purchase intentions. Retailers can leverage these insights to enhance both the cognitive appeal for new users and the emotional connection for regular users, ensuring AR tools are designed to cater to the evolving preferences of all customers.

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