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  • Music and shopping: Beware of Beethoven
    EVER since Muzak started serenading patrons of hotels and restaurants in the 1930s, piped-in music has been part of the consumer experience. Without the throb of a synthesiser or a guitar’s twang, shoppers would sense something missing as they tried on jeans or filled up trolleys. Specialists like Mood Media, which bought Muzak in 2011, devise audio programmes to influence the feel of shops and cater to customers’ tastes. The idea is to entertain, and thereby prolong the time shoppers spend in stores, says Claude Nahon, the firm’s international chief. Music by famous artists works better than the generic stuff that people associate with Muzak. The embarrassing brand name was dropped in 2013.Online shopping is an under-explored area of merchandising musicology. A new study commissioned by eBay, a shopping website, aims to correct that. Some 1,900 participants were asked to simulate online shopping while listening to different sounds. Some results were unsurprising. The noise of roadworks and crying babies soured shoppers’ views of the products on offer. Chirruping birds encouraged sales of barbecues but not blenders or board games.Sounds associated with quality...
  • Schumpeter: Replacing the board
    CORPORATE boards are among the most important institutions in capitalism. Their job is to police the relationship between shareholders who own companies and managers who run them. This means keeping an eye out for managerial incompetence and fraud. It also means standing back and offering strategic advice on hiring new managers or buying competitors.Yet their record might politely be described as mixed. The first decade of the 21st century produced an embarrassment of dismal oversight, from the Enron and WorldCom scandals of 2001-02 to the financial crisis of 2007-08. “I actually don’t think risk management failed,” said Larry Fink, the boss of BlackRock, an investment firm. “I think corporate governance failed, because…the boards didn’t ask the right questions.”Problems have been widespread and deep-rooted. Chief executives have packed boards with cronies: Michael Eisner’s board at Disney once included the former headmistress of his children’s school and the man who designed his house. They have sidelined critics: when a member of the Bank of America’s board criticised the CEO’s compensation in 2000 she was dropped.The past decade has seen several attempts to...
  • Travel websites: David vs two Goliaths
    Service poor, view disappointing “BREAKFAST is nasty, the rooms are nasty.” So complained a reviewer of an Oregon guesthouse earlier this year. There is nothing unusual in that: all hotels must deal with the odd disgruntled guest. This critique, though, appeared on TripAdvisor, a travel-review website. When the correspondent went on to document drunken housekeepers and licentious receptionists, the owners sued him. It was more than a point of pride. What customers say on TripAdvisor can make or break hotels. Around 260m people visit the site each month to read some of the 125m reviews.The firm makes money by displaying prices from online travel-agents (OTAs) alongside its reviews, and then charging those agents each time a customer clicks through. It is such a good example of a network effect that it is the subject of a Harvard Business School (HBS) case study. The more users post reviews, the more useful the site is to those about to book a holiday. This makes it more important to hotels and travel agents, who offer better deals. This results in more traffic—and more reviews—closing the virtuous circle. Last year TripAdvisor...