Monthly Archives: March 2026

Study Identifies Significant Fees and Competitive Challenges in Options Trading

Could the way the options market is set up be quietly costing you far more than your stock trades? A recent study published in The Review of Financial Studies suggests that it might. The paper, titled “Payment for Order Flow and Option Internalization,” looks at how current rules in the options market allow certain firms to earn high profits while creating incentives that may not always favour everyday investors. While regulators have paid close attention to stock trading in recent years, this research argues that the more complex options market has received far less scrutiny.

One of the key findings is that brokers earn much more money from options trades than from stock trades. When a broker sends an options order to a trading firm, they receive what is called “payment for order flow.” On average, a retail options trade brings in about 40 cents per 100 shares for the broker, compared with roughly 20 cents for a similar stock trade. When you look at it another way, each dollar invested in options can generate up to ten times more revenue for a broker than a dollar invested in stocks. This creates a situation where brokers may have a financial reason to steer clients towards options trading.

This difference in earnings raises concerns about potential conflicts of interest. If brokers make significantly more from options, they may be more likely to encourage frequent or more complex options trades, even if those trades are not necessarily in the best interest of the investor. For individuals who may not fully understand the risks of options trading, this could lead to higher costs and potentially poorer financial outcomes over time.

The study also points to barriers that make it difficult for new firms to compete in the options market. A key rule gives certain firms, known as designated market makers (DMMs), the right to handle the first portion of trades they bring to an exchange. This gives them a built-in advantage, as they can trade against incoming orders without always offering the most competitive price available in the wider market. As a result, a small number of firms dominate this space.

In fact, the research shows that just two major firms control a large share of the market. Together, they hold about 60 per cent of these designated positions and handle more than 70 per cent of retail options trading orders. This level of concentration means there is less competition, which can keep costs higher for investors. Although there are systems in place, such as auctions designed to improve prices, these are not always used in ways that benefit retail traders.

All of this is happening at a time when options trading has become increasingly popular among individual investors. The authors suggest that better transparency and changes to certain market rules could help reduce costs and improve fairness. For example, requiring more detailed data reporting and adjusting exchange fees could make it easier for new competitors to enter the market. By highlighting these issues, the study offers important insights for regulators aiming to create a more balanced and investor-friendly trading environment.

More information: Thomas Ernst et al, Payment for Order Flow and Option Internalization, Review of Financial Studies. DOI: 10.1093/rfs/hhaf108

Journal information: Review of Financial Studies Provided by Carnegie Mellon University

Report Connects Legacy Emissions to Trillions in Upcoming Economic Impacts

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A new study from Stanford University finds that the future economic consequences of carbon dioxide emissions released decades ago are expected to exceed far the damage already experienced. Published on March 25 in Nature, the research assigns monetary values to the harm caused over time by emissions from both countries and major corporations. The findings highlight how past emissions continue to generate long-lasting and escalating economic costs across the globe, underscoring the enduring nature of climate-related damage.

The analysis estimates that emissions from the United States since 1990 have already resulted in more than $10 trillion in global economic losses. These impacts are widely distributed, with substantial harm observed in developing economies, including approximately $330 billion in Brazil and $500 billion in India. Notably, a significant portion of the damage—around $3 trillion—has also occurred within the United States itself, while Europe has borne roughly $1.4 trillion in losses. According to lead author Marshall Burke, U.S. emissions have had measurable negative effects on domestic economic output, although lower-income regions experience disproportionately greater impacts relative to their economic size.

The study also examines emissions linked to corporate activity, particularly those associated with Saudi Aramco, the world’s largest corporate emitter. Emissions tied to its oil production and use between 1988 and 2015 have already generated about $3 trillion in global damages by 2020. If these emissions persist in the atmosphere through the end of the century, the total damage could rise dramatically to an estimated $64 trillion. Burke emphasises that as long as carbon dioxide remains in the atmosphere, it continues to drive warming, and that warming in turn produces ongoing economic harm.

The researchers frame these impacts using the concept of “loss and damage,” which refers to the costs that cannot be prevented through emissions reductions or adaptation strategies. This idea is increasingly relevant in international climate negotiations and legal discussions around liability. Co-author Solomon Hsiang compares greenhouse gas emissions to unmanaged waste, noting that societies typically pay for waste disposal because it imposes costs on others. In contrast, the accumulated emissions in the atmosphere represent an unpaid and growing liability, with damages effectively compounding over time.

The study also explores the role of carbon removal technologies in reducing long-term costs, emphasising the importance of timing. The findings suggest that if carbon dioxide remains in the atmosphere for 25 years before being removed, approximately half of its total expected damage has already occurred. Co-author Noah Diffenbaugh explains that because warming affects economic growth cumulatively, the duration of emissions in the atmosphere is a critical factor in evaluating both past damages and the effectiveness of potential interventions.

Compared to an earlier version of the research released in 2023, the updated estimates are significantly higher due to the inclusion of delayed and persistent economic effects from warming. The researchers note that extreme heat events can have long-lasting consequences, amplifying overall damage estimates when these long-term impacts are considered. While the study incorporates key economic indicators, it does not fully capture broader consequences such as biodiversity loss, cultural displacement, or certain climate risks like sea level rise and extreme weather events. As a result, the authors describe their estimates as conservative, suggesting that the true scale of climate-related economic harm is likely even greater.

More information: Marshall Burke et al, Quantifying climate loss and damage consistent with a social cost of carbon, Nature. DOI: 10.1038/s41586-026-10272-6

Journal information: Nature Provided by Stanford University

Study Finds Foreign Direct Investment Falls Short as a Growth Solution

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Foreign direct investment (FDI) has long been regarded as a dependable driver of economic growth, often credited with creating jobs, boosting productivity, and transferring new technologies into host economies. For decades, policymakers and economists have treated it as a key mechanism for development and competitiveness in an increasingly globalised world. Yet new research suggests that this widely accepted view may be overly simplistic. Rather than delivering consistent and predictable benefits, FDI appears to operate in far more complex and uncertain ways, challenging the assumption that it can reliably serve as a universal engine of growth.

A recent study conducted by academics at the University of East London finds that FDI does not consistently generate the positive outcomes often associated with it. The research shows that its impact varies significantly depending on a range of factors, including the motivations behind investment, the economic and institutional conditions of the host country, and the specific characteristics of the industry involved. In some contexts, foreign investment can stimulate innovation and economic expansion. In others, however, it may displace local firms, widen income inequality, or contribute to long-term economic dependency. These findings suggest that FDI cannot be treated as a one-size-fits-all solution.

Drawing on more than six decades of academic literature, the study highlights the uneven and context-dependent nature of foreign investment outcomes. It underscores that simply increasing the volume of FDI is not sufficient to ensure positive results. Instead, the effectiveness of such investment hinges on alignment—between investor intent, local economic conditions, and sectoral dynamics. Where this alignment exists, FDI can enhance growth and productivity. Where it does not, the benefits may be limited or even counterproductive. This perspective calls into question longstanding economic assumptions that have tended to view FDI as broadly beneficial regardless of context.

The research also points to limitations in existing theoretical frameworks used to understand FDI. Many of these theories were developed in the context of advanced economies investing abroad and may not adequately reflect the realities of today’s global investment landscape. In particular, they struggle to explain the rising role of firms from emerging economies, which increasingly invest overseas not only to leverage existing advantages but also to acquire new capabilities and strengthen their global competitiveness. This shift complicates traditional interpretations and suggests that prevailing models may need to be revisited or expanded.

According to Kirk Chang, Professor at the Royal Docks School of Business and Law, foreign direct investment has often been oversimplified in both policy and academic discourse. He argues that it has been treated as a kind of economic cure-all, despite evidence that its success depends heavily on contextual alignment. Without a clear fit between investor motives, local conditions, and industry needs, outcomes can be uncertain and sometimes disappointing. Co-author Susan Akinwalere further emphasises that policymakers and business leaders must move beyond assumptions and focus on how well each investment aligns with national priorities, sectoral requirements, and long-term development goals.

More information: Susan Akinwalere et al, What Can Make ‘Foreign Direct Investment’ Work? Investors’ Motivation, Country Context and Industry Context All Play Their Roles, Journal of Industry Competition and Trade. DOI: 10.1007/s10842-026-00463-2

Journal information: Journal of Industry Competition and Trade Provided by University of East London

As Healthcare Modernises, Patients Struggle to Keep Up

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Patients are increasingly expected to manage large parts of their care online, whether that means speaking with a doctor through a screen, arranging appointments, renewing prescriptions, or viewing test results via digital portals. While these tools promise convenience and efficiency, they also assume a level of comfort with technology that not all patients possess. For many, what is designed to simplify care can instead become another barrier to accessing it.

However, a new study from the University of California, San Francisco, suggests that health systems are often overlooking a fundamental question: do their patients actually have the means and ability to use these digital services? Without assessing access to devices, internet connectivity, or digital literacy, organisations may be widening existing gaps rather than closing them. The shift towards digital care, while well-intentioned, risks excluding those already at a disadvantage.

The researchers gathered responses from nearly 150 clinicians and informatics leaders working in health systems across the United States during the first half of 2024. Fewer than half—just 44 per cent—reported that they routinely asked patients whether they could use digital devices. The numbers were even lower among institutions serving uninsured populations, where only about one-third carried out such checks. These findings highlight a concerning disconnect between the adoption of digital tools and the realities faced by patients.

Dr Elaine C. Khoong, an associate professor of medicine at UCSF and senior author of the study, emphasised that not everyone benefits equally from digital innovation. Those who struggle to access or use these tools are often the same individuals who already experience poorer health outcomes and limited access to care. The study, published in February in the journal JMIR Formative Research and funded by the National Institutes of Health, brings attention to how digital transformation can unintentionally reinforce health inequalities.

Drawing on her experience as both a general internist and clinical informaticist, Khoong has witnessed patients missing important medical messages simply because they were unaware they had an online account. Others received links by text or email but did not know how to open them. These seemingly small gaps in understanding can lead to missed information, delayed care, and increased frustration, particularly for those who are already navigating complex health issues.

The researchers argue that healthcare organisations should take a more proactive approach by training staff to assess patients’ digital readiness using standardised tools. They also suggest that policymakers should create stronger incentives for such assessments, integrating them into routine screenings alongside factors like housing instability, food insecurity, and domestic abuse. Yet significant barriers remain, with many respondents citing limited time and resources as major challenges. Even among those who do screen for digital access, nearly half reported lacking the support needed to help patients engage with online systems. These challenges have been compounded by recent policy changes, including the termination of the Affordable Connectivity Program in mid-2024, which had provided internet subsidies to low-income households.

More information: Jonathan J Shih et al, Screening by Health Care Systems for Barriers to Patient Engagement With Digital Health Care: Cross-Sectional Survey Study, JMIR Formative Research. DOI: 10.2196/85205

Journal information: JMIR Formative Research Provided by University of California – San Francisco

Access to Earned Wages on Demand Linked to Higher Savings and Financial Activity, Study Finds

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New research published in the Information Systems Research shows that allowing low-wage workers to access their earnings before payday can meaningfully improve how they manage their finances. The study found that when workers are able to withdraw wages as they earn them, they are more likely to save money, keep track of their finances, and plan. This approach, known as On-Demand Wage Access (OWA), is becoming increasingly common as financial technology continues to reshape how people receive and use their income.

According to the findings, workers who used OWA showed noticeable improvements in several financial habits. Monthly saving frequency rose by 3.7%, while checking financial dashboards increased by 12.9%. There was also a smaller but still important rise in setting financial goals, at 1.3%. These changes suggest that when people are not restricted by fixed pay cycles, they become more engaged with their money and more intentional about how they use it.

Many low-wage workers in the United States face ongoing challenges because they cannot easily access the money they have already earned. Expenses often arise before payday, and without enough savings or access to affordable credit, workers may feel forced to rely on high-interest payday loans or short-term borrowing. Even individuals with relatively stable finances can struggle with the gap between earning wages and actually receiving them, which can create unnecessary financial stress.

OWA platforms aim to address this issue by giving workers more control over their income. Companies such as Walmart, Uber, and DoorDash have adopted these systems, allowing employees to withdraw a portion of their earned wages at any time. The study suggests that this flexibility does more than solve short-term cash flow problems—it can also encourage better long-term financial behaviour. By having access to their earnings when needed, workers are more likely to make thoughtful financial decisions rather than reacting to immediate pressure.

To better understand these effects, researchers analysed detailed financial data from around 4,000 low-wage workers over several months. They combined this data with surveys, interviews, and experiments to build a clearer picture of how people actually use OWA. Many participants reported feeling more in control of their finances, as they no longer had to wait for fixed paydays or rely on costly alternatives. This sense of control supported more consistent saving and better financial planning overall.

However, the study also found that the benefits of OWA depend on how it is used. Workers who frequently paid extra fees for instant withdrawals did not experience the same improvements in savings or financial engagement. In these cases, the convenience of immediate access sometimes reduced the positive impact. The researchers also noted that OWA was especially helpful in areas with lower wages or limited access to banking services. In such settings, it can play an important role in improving financial inclusion, provided that the systems are designed carefully to support responsible use.

More information: Jihye Kim et al, Working Daily, Paid Monthly? Effects of On-Demand Wage Access on the Financial Engagement of Low-Wage Workers, Information Systems Research. DOI: 10.1287/isre.2023.0673

Journal information: Information Systems Research Provided by Institute for Operations Research and the Management Sciences

When Digital Targeting Feels Too Invasive

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Years into the large-scale shift towards personalised digital marketing, many people recognise a familiar experience. You search for a product online or casually mention it in conversation, and before long, advertisements for that exact item begin appearing across apps, websites, and social media feeds. While the technology behind this level of targeting can be impressive, the experience itself often feels intrusive rather than helpful. Instead of creating convenience, it can leave users with a lingering sense of discomfort.

This reaction is at the heart of recent research led by marketing scholar Wayne Hoyer at the McCombs School of Business, University of Texas at Austin. His work suggests that when personalisation goes beyond what consumers consider acceptable, it triggers a distinct emotional response described as “creepiness”. Rather than improving engagement, this feeling can have the opposite effect, significantly reducing a person’s willingness to make a purchase. What may seem like effective targeting from a technical perspective can therefore become counterproductive from a psychological one.

The research proposes that this sense of unease does not come from digital marketing itself, but from how individuals interpret it. The emotional response develops in two stages. First, consumers experience ambiguity, questioning how and why they are seeing a particular advertisement. This is followed by a more troubling interpretation, where the message is perceived as evidence of surveillance. When people begin to feel as though they are being watched or tracked too closely, the emotional reaction intensifies and becomes negative.

To explore this further, researchers conducted multiple studies involving around 1,800 participants. Some individuals were exposed to highly targeted advertisements, such as seeing promotions for products shortly after discussing them, while others were shown non-targeted ads. Participants were then asked to evaluate their level of discomfort and explain their reactions. The findings showed that feelings of ambiguity and perceived surveillance accounted for the majority of reported unease. Personalised ads were also found to significantly increase the sensation of being monitored, and as these feelings grew stronger, willingness to purchase declined noticeably.

The studies also revealed that certain individuals are more sensitive to these effects than others. People who are generally sceptical of advertising or concerned about the reach of technology were more likely to interpret targeted messaging as intrusive. For these groups in particular, personalisation quickly shifts from being a useful feature to an invasion of privacy. This highlights an important challenge for marketers, as the same strategy can produce very different reactions depending on the audience.

Attempts to reduce these negative feelings have shown limited success. Strategies such as increasing transparency about data use, offering incentives, or including positive imagery in advertisements can soften reactions slightly. Still, they do not fully eliminate the sense of discomfort once it has been triggered. As a result, the research suggests that prevention is far more effective than correction. Designing marketing approaches that avoid creating ambiguity or signalling excessive surveillance is crucial. Although it is possible that consumers may become more accepting of personalisation over time, marketers must carefully balance innovation with respect for privacy to avoid pushing their audiences away.

More information: Alisa Petrova et al, The Phenomenon of Creepiness in a Digital Marketing World, Psychology and Marketing. DOI: 10.1002/mar.70089

Journal information: Psychology and Marketing Provided by University of Texas at Austin

A New Analysis of the Paradox of Firms’ Proprietary Technologies

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A firm’s capacity to develop distinctive technology can be a powerful strategic advantage, yet it may also become an expensive and isolating trait. A recent study in the Strategic Management Journal offers compelling empirical evidence of this tension, illustrating both the rewards of technological distinctiveness and the potential drawbacks of standing apart from industry norms. The findings point to a nuanced paradox: while uniqueness can drive superior outcomes, it may simultaneously impose hidden costs that offset its benefits.

The research, conducted by Yang Fan of Colby College, Lubomir Litov of the University of Oklahoma, Mu-Jeung Yang of the University of Colorado, and Todd Zenger of the University of Utah, centres on the inherent trade-off firms face when pursuing unique technological paths. On one side, highly distinctive technologies are more difficult for competitors to replicate, thereby strengthening intellectual property protection and sustaining competitive advantage. On the other hand, such uniqueness can distance firms from the broader technological ecosystem, limiting their ability to draw insights from related developments across the industry.

This tension raises important strategic questions. As Mu-Jeung Yang notes, it is not only whether technological uniqueness benefits firms on average, but also which types of firms are most likely to gain or lose from it. In other words, the value of uniqueness is not uniform. It depends on contextual factors such as industry dynamics, the pace of technological change, and a firm’s own strategic orientation. Understanding these contingencies is central to evaluating whether pursuing a distinct technological trajectory is worthwhile.

To investigate this trade-off in depth, the researchers developed an innovative measure of technological uniqueness. Building on prior work in patent analysis, they assessed how closely a firm’s technological profile aligns with that of its competitors. Firms whose patent portfolios diverge significantly from industry peers are considered more technologically unique. Using this framework, the team examined how such uniqueness influences knowledge spillovers, financing costs, and overall financial performance, thereby capturing both its benefits and its associated constraints.

The results reveal a complex picture. Firms with greater technological uniqueness tend to achieve stronger performance outcomes, while those with lower levels of uniqueness often underperform. However, these advantages come with notable downsides. Highly unique firms receive fewer knowledge spillovers from competitors, reducing opportunities for learning and incremental improvement. Moreover, their distinctiveness can make them harder for external stakeholders to evaluate. Equity analysts, for instance, may struggle to interpret their prospects and are more likely to discontinue coverage, further increasing informational opacity.

Ultimately, the study suggests that the decision to invest in unique technology must be carefully calibrated. Firms operating in environments with rapid and substantial knowledge spillovers may find that excessive uniqueness limits their access to valuable external insights. Similarly, in capital-intensive industries, the costs associated with developing and sustaining unique technologies can outweigh the benefits. By contrast, firms pursuing aggressive growth strategies and substantial research and development investments are better positioned to capitalise on technological distinctiveness. In this sense, the value of uniqueness is contingent, shaped by both industry conditions and firm-specific capabilities.

More information: Yang Fan et al, The technological uniqueness paradox, Strategic Management Journal. DOI: 10.1002/smj.70043

Journal information: Strategic Management Journal Provided by Strategic Management Society

Investors Showing Willingness to Spend More on Green Bonds

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Investors who prioritise sustainability often argue that they can support environmentally friendly initiatives without giving up financial returns. However, recent research from the Texas McCombs School of Business challenges that assumption. The findings suggest that investors may, in fact, be willing to accept slightly lower returns in exchange for environmentally responsible investments. At the same time, this behaviour presents a potential opportunity for governments to raise additional funding for sustainable projects by tapping into this preference.

Evidence from Germany’s sovereign bond market reveals that investors are quietly paying a premium for green bonds. Rather than offering higher returns, these bonds tend to yield slightly less than their conventional counterparts, indicating that investors are effectively accepting a financial trade-off. This difference, referred to as the “greenium,” reflects the added value investors place on environmentally labelled securities. The term captures the idea that sustainability itself can influence pricing in financial markets.

The study, led by Aaron Pancost alongside Stefania D’Amico of the Federal Reserve Bank of New York and Johannes Klausmann from the University of Houston, examined German government bonds issued between 2009 and 2023. Germany provided an ideal case study because each green bond is paired with a nearly identical conventional bond, sharing the same issuer, maturity, and coupon rate. This pairing allows researchers to isolate the effect of the “green” label itself, ensuring that any price difference can be attributed to investor preferences for sustainability rather than other variables.

Even so, measuring the greenium proved more complex than simply comparing yields between paired bonds. Market dynamics can influence spreads for reasons unrelated to environmental considerations. For instance, traditional German bonds are often used as safe-haven assets during periods of uncertainty or as collateral in financial transactions, which can distort pricing. To address this, the researchers developed a broader analytical approach, modelling pricing trends separately for green and conventional bonds. By comparing these patterns, they derived a more precise estimate of the greenium.

Their findings show that the greenium averaged around four basis points over time, equivalent to roughly four per cent of the yield on a ten-year bond. However, this premium was not constant. It tended to increase following major climate-related events, such as severe flooding in Germany, and during periods of heightened energy stress. After Russia invaded Ukraine, for example, the greenium rose to approximately seven basis points. By 2023, the premium was more pronounced in short-term bonds than in long-term ones, suggesting that investors expect the gap to narrow over time.

Although the difference between green and conventional bonds is relatively modest, its implications are significant. By accepting slightly lower yields, investors are effectively subsidising environmentally beneficial projects. This behaviour could allow governments to issue more short-term green bonds at reduced interest rates, lowering borrowing costs for taxpayers. While countries such as Germany, France, and the UK have already embraced green bond issuance, the United States has yet to do so at the federal level. The research highlights this as a missed opportunity, as growing investor demand indicates a clear willingness to prioritise sustainability—even at the expense of marginal financial returns.

More information: Stefania D’Amico et al, The benchmark greenium, Journal of Financial Economics. DOI: 10.1016/j.jfineco.2025.104217

Journal information: Journal of Financial Economics Provided by University of Texas at Austin

ESMT Berlin Research: What Makes Salespeople Reluctant to Promote Radical Innovations

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Companies continue to invest heavily in breakthrough technologies, ranging from advanced industrial software to AI-driven platforms. Yet many of these radical innovations fail to gain traction, not because customers reject them, but because sales teams are hesitant to promote them actively. Recent research from ESMT Berlin highlights a crucial psychological barrier underlying this reluctance: the fear among salespeople of “losing face” when engaging with customers. This fear, rooted in concerns about professional image and credibility, can quietly undermine even the most promising innovations before they reach the market.

The study, conducted by Bianca Schmitz (ESMT), Julian Schmalstieg (Freie Universität Berlin), Olaf Ploetner (ESMT), Andreas Eggert (Freie Universität Berlin), and Johannes Habel (University of Houston), provides a comprehensive examination of this issue. Their article, Selling Radical Innovations, was published in the peer-reviewed journal Industrial Marketing Management. Drawing on 69 in-depth interviews with managers and sales professionals, alongside two large-scale surveys involving nearly 400 industrial salespeople across the United States and the United Kingdom, the researchers uncover an often-overlooked emotional mechanism that hinders the commercial success of innovative products.

Radical innovations differ fundamentally from incremental improvements. These products typically involve unfamiliar technologies, target new customer segments, or require entirely different business models. As a result, they push salespeople beyond their established areas of expertise. Unlike routine product upgrades, which rely on existing knowledge and relationships, radical innovations demand adaptability, learning, and engagement with uncertainty. This shift creates a challenging environment in which traditional sales approaches may no longer be sufficient.

The research shows that salespeople frequently anticipate what the authors describe as “consultation failures.” These may include providing incorrect information, being unable to respond effectively to customer questions, or making commitments that cannot ultimately be fulfilled. Such expectations heighten anxiety about negative evaluation, leading to a fear of public embarrassment or damage to professional reputation. This emotional response goes beyond a simple lack of knowledge; it reflects a deeper concern about being perceived as incompetent in front of clients.

Importantly, the study finds that this fear has a measurable impact on performance. Salespeople who experience a strong fear of losing face are significantly less effective in selling radical innovations, which can cause even high-quality products to struggle in competitive markets. The effect is particularly pronounced among individuals with very high personal standards, low openness to change, or limited experience navigating uncertain situations. Interestingly, top-performing sales professionals—especially those who strongly identify as product experts—may be more vulnerable, as radical innovations often require collaboration and continuous learning rather than mastery from the outset.

At the same time, the findings suggest that this barrier can be overcome. When salespeople feel supported, confident, and encouraged to engage collaboratively, radical innovations are more likely to succeed. The research indicates that organisations must move beyond traditional product-focused training and instead invest in consultation support systems, foster adaptability, and redefine the sales role. Rather than acting as solitary experts, successful salespeople in this context become collaborative problem-solvers who work closely with technical specialists. In this way, the key determinant of success lies not in the innovation itself, but in the psychological environment surrounding its sale.

More information: Bianca Schmitz et al, Selling radical innovations, Industrial Marketing Management. DOI: 10.1016/j.indmarman.2025.09.002

Journal information: Industrial Marketing Management Provided by ESMT Berlin

SKKU Professor Unveils Innovative Talent Recruitment Strategy

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Sang Won Han, an Assistant Professor of Sociology at Sungkyunkwan University and co-first author of the study, has collaborated with Shinjae Won, an Associate Professor of Management and Strategy at Ewha Womans University, to publish new research in the Strategic Management Journal, one of the leading publications in the field of management. Their paper, titled “Hiring at the Tip of the Funnel: Externalising the Work of Integrating and Coordinating Diverse Human Capital,” presents a fresh perspective on how organisations can address one of the most persistent challenges in talent recruitment.

When firms recruit externally, they encounter a fundamental trade-off. On one hand, hiring from diverse sources brings in valuable knowledge, skills, and perspectives that can drive innovation. On the other hand, such diversity can increase the complexity and cost of integrating employees with different backgrounds, experiences, and ways of working. Traditional approaches tend to frame this as a choice between diversity and efficiency, often forcing firms to prioritise one at the expense of the other.

This study moves beyond that conventional framing by examining talent mobility through the lens of inter-firm networks. Rather than focusing solely on individual hiring decisions, the research highlights how firms are embedded within broader systems of employee movement across organisations. It argues that a company’s performance is shaped not just by whom it hires directly, but by its position within this wider network of talent flows.

Central to the study is the concept of the “Tip of the Funnel.” This strategy involves firms concentrating their recruitment efforts on a small number of carefully selected organisations that themselves attract talent from a wide range of sources. By doing so, firms can gain indirect access to diverse knowledge and capabilities without bearing the full internal costs of integrating highly varied employees. In essence, the integration work is partially externalised to upstream firms within the network.

Empirical evidence supports the effectiveness of this approach. The study highlights the example of Nvidia in 2016, which focused its hiring on a limited set of firms such as Cisco and Intel—organisations that themselves recruited broadly. By positioning itself at the downstream end of this “funnel,” Nvidia was able to benefit from diverse human capital while maintaining organisational coherence. This network positioning was associated with strong innovation performance, suggesting that such strategies can significantly enhance firm outcomes.

The research also finds that the advantages of this approach are particularly pronounced in organisations with cohesive cultures, where shared values and norms facilitate the integration of new employees. Overall, the study reframes talent acquisition as a question of strategic positioning within talent mobility networks. As Professor Han explains, firms can improve performance by selectively hiring from organisations that have already integrated diverse talent, turning network structure into a source of competitive advantage while balancing innovation with organisational efficiency.

More information: Sang Won Han et al, Hiring at the tip of the funnel: Externalizing the work of integrating and coordinating diverse human capital, Strategic Management Journal. DOI: 10.1002/smj.70076

Journal information: Strategic Management Journal Provided by Sungkyunkwan University External Affairs Division

Managers Must Recognise Both the Strengths and Weaknesses of Online Meetings

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Video meetings have become a central feature of modern workplaces, particularly as organisations adopt remote and hybrid working arrangements. A recent study involving senior managers in the IT sector highlights how video meetings influence leadership in complex and sometimes contradictory ways. Platforms such as Microsoft Teams and Zoom are now firmly embedded in daily organisational routines. Despite their widespread use, their effects on leadership have not been thoroughly examined from the perspective of both the opportunities and constraints created by digital technology. Research conducted at the University of Eastern Finland addresses this gap by exploring how video technology shapes the experience of managers leading remote teams.

The study found that video technology plays a dual role in leadership. In some situations, it functions primarily as a tool for sharing information. Managers frequently rely on video meetings to communicate updates, conduct staff briefings, or deliver pre-recorded messages to employees. In these cases, video provides a practical way to distribute information quickly and consistently across teams. At the same time, video meetings also serve as an interactive platform that allows managers to hold discussions, exchange ideas, and engage directly with both teams and individual employees.

Many managers consider video technology to be a flexible and efficient method of communication. It allows people to participate in meetings regardless of location and reduces the need for travel. However, the study suggests that the interactive use of video meetings also presents several challenges. Researchers identified five key tensions that shape how managers experience and manage video-based communication in their daily work.

The first tension involves flexibility and inflexibility. Video meetings can streamline time management by making it easier to organise discussions across different locations and time zones. Managers and employees can connect quickly without logistical complications. Yet the same convenience can create pressure when meetings accumulate rapidly. Because scheduling a video call is so simple, calendars often become overcrowded, which can lead to stress and fatigue for managers who must attend numerous meetings throughout the day.

A second tension concerns social connection and social distance. Video meetings allow teams to maintain contact and visibility even when colleagues are physically separated. Seeing one another on screen can help preserve a sense of belonging and collaboration. Nevertheless, digital interaction often lacks the spontaneity and emotional richness found in face-to-face encounters. Casual conversations and subtle emotional cues are more difficult to convey through a screen, meaning that employees may still feel socially distant despite frequent video communication.

The third tension identified in the study relates to participation and passivity. Although video meeting platforms offer tools designed to encourage engagement, managers frequently encounter difficulties in motivating employees to participate actively. Some individuals prefer to keep their cameras turned off, multitask during meetings, or remain silent while others contribute. As a result, leaders may struggle to generate meaningful dialogue or ensure that all voices are heard during discussions.

The research also identified two additional tensions related to information sharing and workplace equality. Video meetings are effective for transmitting formal information quickly and clearly, yet they often fail to capture informal knowledge, subtle cues, and tacit insights that emerge naturally in physical workplaces. Furthermore, while video meetings can create greater equality by allowing employees in different locations to join the same discussion, they may also reveal differences in how individuals communicate, participate, and engage with digital tools. According to Professor Jonna Koponen, the study highlights that successful remote leadership requires managers to balance the possibilities offered by technology with the limitations it inevitably introduces.

More information: Jonna Koponen et al, Dual edge: exploring technological affordances and constraints of video technology in e-leadership, Information Technology and People. DOI: 10.1108/ITP-09-2024-1157

Journal information: Information Technology and People Provided by University of Eastern Finland

Augmented Reality Training Enhances Job Performance by 79% for Employees with Disabilities

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Employment can be an important pathway to independence, dignity and belonging. Having a job allows people to earn their own income, develop new skills and become active members of their communities. Work can also improve mental and physical wellbeing by providing a sense of purpose and social connection. However, for many individuals with intellectual and developmental disabilities (IDD), access to employment opportunities remains limited.

Despite the benefits of work, only about 15% of individuals with IDD are employed in competitive and integrated workplaces. This means that many people with disabilities are excluded from opportunities that could improve their quality of life. Competitive, integrated employment refers to jobs where individuals with disabilities work alongside people without disabilities and receive fair wages. Although efforts have been made to increase inclusion, many barriers still prevent individuals with IDD from entering or remaining in the workforce.

Several programmes aim to support individuals with disabilities in finding and keeping jobs. Supported employment programmes provide job coaching, where trained professionals guide workers through tasks and help them adjust to the workplace. Another approach, known as customised employment, adapts job roles to match better the strengths and needs of both the employee and the employer. These programmes have helped many individuals gain employment, but challenges continue to affect long-term success.

One of the main difficulties is the inconsistency of support services. Job coaches may leave their positions frequently, which can interrupt training and make it harder for employees to maintain progress. Individuals with IDD may also experience social and environmental challenges at work, such as understanding workplace expectations, communicating with colleagues and completing complicated tasks. These challenges can make it harder for individuals to remain employed over time.

Researchers at Florida Atlantic University explored whether augmented reality (AR) technology could help address some of these barriers. They developed an AR-based application designed to function as a digital job coach. The system provides real-time instructions and guidance while a person is completing a task, helping users follow each step without relying entirely on direct support from another person.

To test this idea, researchers conducted a study in which participants with IDD worked as library assistants and practised shelving books. This task was selected because it requires several skills at once, including reading labels, listening to instructions and using logical thinking to organise books correctly. These types of skills can be challenging when learning a new job, making the task a useful way to evaluate whether AR technology could improve training and performance.

At the beginning of the study, participants attempted the task without the AR system. During this baseline phase, their performance was quite low. On average, participants completed only about 14% of the required steps correctly. Once the AR-based job coach was introduced, however, performance improved dramatically. Participants began following the real-time instructions provided by the system, which helped them complete the tasks more accurately and independently.

With the AR support in place, average task accuracy increased to 93%, and some participants reached 100% accuracy. All participants eventually achieved the study’s mastery criteria by completing at least 90% of the task steps correctly and independently across multiple sessions. The findings, published in Focus on Autism and Other Developmental Disabilities, suggest that augmented reality could become a powerful and cost-effective tool for job training. By providing real-time guidance, AR technology may help individuals with IDD learn tasks faster, work more independently and gain better access to meaningful employment opportunities.

More information: Ayse Torres et al, Augmented Reality Enhanced Supported Employment for Individuals With Intellectual and Developmental Disabilities, Focus on Autism and Other Developmental Disabilities. DOI: 10.1177/10883576251407604

Journal information: Focus on Autism and Other Developmental Disabilities Provided by Florida Atlantic University