Marketing as an ever-evolving subject

Although Dr. Du majored in economics and finance, a string of fortuitous occurrences has eventually brought him to marketing. Through a chronic process of attending marketing seminars and experiencing the joy of using economics theory in his marketing electives, Dr. Du started to believe that he has a perfect fit with marketing. Dr. Du believes that marketing is a very lively subject to study. The market changes quickly, that the best sales strategy today would be obsolete next year. This has not only supplied an endless stream of questions to research but also encourages collaboration between scholars and industry practitioners. Therefore, Dr. Du believes that studying marketing could allow one keeping pace with the world.

Although the private sector also has its research teams, Dr. Du believes that tight deadlines and hectic work pace are unconducive to knowledge creation. Dr. Du enjoys being intellectually challenged, he wanted to focus on a specific topic deeply. In addition, he observes that the private sector rarely provide opportunities for researchers to revise and improve unsatisfactory projects. Dr. Du believes that failure is not necessarily the end of a program. It may offer researchers a deeper understanding of the subject matter and allow researchers to investigate them from a different perspective on their next try. Given these concerns, Dr. Du had chosen to develop his career in academia.

To beat the postgrad game

For students interested in becoming a scholar, Dr. Du recommends them to attend more seminars for research insights and seize every research assistant opportunity in order to experience the researcher’s life. Dr. Du observes that students often choose research topics in order to follow the footsteps of their idol scholars. But what your idol is working on may not necessarily be your interests. Dr. Du argues that being passionate about your research topic is very important to keep you moving on amidst repeated failures. As failure in research is common, Dr. Du recommends students should work on several projects in tandem. In case one of your projects has met a dead end, you can immediately hop onto another one.

To provide more background information to students, academia is a very generous place for knowledge creation. It encourages scholars to keep polishing and adding on their existing research for an unlimited time until it is published. This explains why some scholars could keep on working their PhD papers years after they have finished their postgraduate programme.

During the interview, Dr. Du had also debunked the misconception that scholars do not need people skills. Dr. Du points out that as the focus questions in marketing are not clearly identified, scholars have to pay extra effort in persuading industry practitioners and other scholars why their research matters. Moreover, good communication skills are important in the creation of readable papers and to deliver your message clearly on different occasions.

A remarkable experience – Why hiding information is conducive

One of the most remarkable experiences for Dr. Du is his sharing in a Boston symposium. As a short summary, Dr. Du concludes that platforms that seek to match two sides of users need not provide perfect information to its users in order to minimize competition. For example, users of lodging platforms are exposed to both vertical and horizontal information. Vertical information is very general and would usually be goods preferred by most users, such as Wi-Fi and air-con. Horizontal information, on the other hand, is very specific and stringent, referring to location, interior design, and transportation network. While everyone wants Wi-Fi, not everyone wants to live in Kings Road.

While everyone wants the perfect house, the sad reality is that the supply for the perfect good is scarce no matter how many vendors a platform has. Providing too much vertical information for users will also create a false competition that everyone is competing for that particular house with Wi-Fi in Kings Road. As users expect platforms can deliver services instantly, competition among users is undesirable. Therefore, Dr. Du suggests that platforms should let the horizontal information guide the selection.

This research finding has drawn the attention of a representative of a venture fund specializing in investing lodging platforms. Receiving recognition from cross-sectoral talents is rewarding, as it implies that his research has its value in real life.

Coaching doctoral students – Reverse engineering

Communicating with industry practitioners is important for scholars as it allows them to attain firsthand information and keep themselves researching on matters relevant to the world. Dr. Du is honored that he has the opportunity to coach two leading executive figures in their doctoral degree in business administration.

Dr. Du believes that experience is a reverse engineering process. On one hand, Dr. Du is teaching them how to utilize different economic models to calculate the rate of return of digital marketing under a given set of variables and assumptions. On the other hand, he is also learning a lot of industrial insights from them. This is particularly useful to Dr. Du as he is currently researching on how to improve business communications.

Business communications are important as different specialists in a company have their own sets of jargon. Ineffective communication could be costly. For example, if the engineers cannot effectively tell the marketing team what they can or cannot do, while the marketing team cannot effectively tell the engineers what customers want, the end product will be totally irrelevant to the market demand. We see large corporations such as Microsoft have developed their own language manual in order to facilitate inter-company communication. However, it takes a lot of effort to learn a language, and the language is only useful if all parties can understand it. People are realistic and if they believe other parties are not putting in enough effort into learning the language, they will lack an incentive to learn it and the internal language system may collapse. One of Dr. Du’s current project is on studying when the introduction of an internal language system can improve communication and firm advantage, and how a firm can incentivize each party to put in the adequate effort. It is therefore very important for marketing scholars to work closely with industry practitioners in order to create knowledge that will be conducive to their actual operation.

The quantification of marketing

While not everyone looks forward to becoming a scholar, students nowadays are keen on taking a second major to increase their competitiveness in the market. In that regard, Dr. Du recommends students to major in statistics or computer science.

Dr. Du observes that the market’s demand for talents sensitive to statistics and programming is growing exponentially. Marketing talents are not only expected to make strategies through business intuition or past experiences but also using more scientific methodologies to substantiate their claims. Managers nowadays are also increasingly keen on developing their data acumen in order to establish their own views when reading data prepared by their analysts.

Marketing is no longer a talking subject. It is incorporating more and more multidisciplinary knowledge from the fields of psychological science, economic models and statistical knowledge. Students must, therefore, work harder on their numerical reasoning in order to excel.

Knowledge sharing: Competition behaviors among hegemonic platforms & A case study on effective and ethical pricing

Platform competitions and pricing are hot topics in marketing. In order to facilitate students in their studies, we have capitalized on this opportunity to seek advice from Dr. Du in these aspects.

Can regional hegemons invade the market of another regional hegemon and win?

Regional platform hegemons are platform companies so entrenched in their regional market that their dominating status has become unchallenged. However, can the hegemon in Asia beat the African hegemon in its own market? Dr. Du believes that it is possible in three ways.

First, a regional platform hegemon’s rise to power is likely because of a network effect. They have become a natural monopoly because they have entered the game so early that they have the time and resources to capture the first batch of vendors and buyers. When time-lapse, it will create a snowball effect, making them more and more reputable and large in the market. Creating a situation that they are THE best platform in the region. However, Dr. Du believes that the market structure of platform companies allows multi-homing to take place, referring to the situation that customers could afford buying the services of multiple platform companies in tandem. For example, mainland customers could purchase goods from both Taobao and Tianmao.

Second, companies can compete through specialization. Using Craigslist and Airbnb as an example, while the former is an ad platform advertising all kinds of residences, Airbnb focuses specifically on lodging services. Specialization has enabled Airbnb to stand out while indirectly competing with Craigslist.

Lastly, companies are free to adopt different monetary strategies to entrench in different niches and market segments. For example, Tidal and Pandora are both music streaming giants in the North American market but they focus on different customers. Tidal, for example, provide high-quality music without any ads interruption. As a result, it requires customers to pay subscription fees. Pandora, on the other hand, relies heavily on ads income. Therefore, they have opted to provide free services to customers while forcing them to sit through ads. While both are delivering the same services, both are not competing head-to-head with each other as they are targeting customers with different preferences.

Effective pricing and ethical business – A Japanese case study

About a century ago, the CEO of a renowned Japanese retail chain had stated that the market value is unable to reflect the real value of a product and the company will only charge above the cost price. Moreover, even during the Fukushima earthquake in 2016, the company did not mark up the price of their bottled water.

Regarding pricing, in order to encourage students to study marketing in a more scientific manner, Dr. Du believes that students should emphasize on the incremental value of goods and services. If your competitors are charging at 2 dollars and if you can provide an extra value (increment) of 3 dollars, you can charge at 5 dollars. Pricing is beyond supply and demand. Companies not only have to take their competitors’ strategies into consideration, but they also have to be aware of consumers’ pursue of fair pricing. For example, assuming that the functions of a cell phone and an iPhone are the same, it is rational for the retailer to charge both at the same price. However, if consumers discover that the cost price of a cell-phone is 30% lower than that of an iPhone, they would demand the retailer to mark-down the cell phone.

In addition, pricing strategies is to a large extent based on cost structures. Using Walmart as an example, as they purchase in bulk, they could always get the best price from suppliers and charge at a low price. However, if your cost structure cannot afford that, it is better to highlight service experience and product quality instead.

Lastly, about ethical business, Dr. Du argues that doing business is not a one-time game. You have to develop your reputation as your business is expected to continue for years to come, and you want your customers to keep coming back. While CSR may not have a direct impact to support company performance, it is an effective way to avoid being antagonized by social groups.

Way forward

Dr. Du felt very impressed with the strong business acumen that HKU students possess. Comparing case analysis made by MBA students and the undergraduates from his introductory course at HKU, Dr. Du is shocked that the undergraduates are sometimes performing as good as the MBA students. The only thing he felt a bit disappointed is that many undergraduates took marketing because they considered that it’s for those who are bad at mathematics. While Dr. Du is willing to teach them step by step, he hopes that they could muster up the courage to face their inner demons.

Other than nurturing students’ numerical reasoning skills, Dr. Du also hopes that he could contribute to HKU by producing more high-quality research on platform sales. In the long run, he hopes that he can put his practice into work by consulting platform giants such as Alibaba.

The newly launched Alumni Corporate Ambassador Programme (Programme) bought alumni Teddy Liu (MBA 1998) and Udara Senevirathne (BEcon&Fin 2017) together. Though belonging to two generations and sharing different backgrounds, they become colleagues both working at New World Development. We recently had a chance to sit down with them and talk about the Programme.

As the General Manager of Corporate & Talent Development at New World Development, Teddy recalled his MBA journey over 20 years ago, and shared his passion towards nurturing the younger generation. “Young people are very talented, but they need more coaching so they can excel at their work’, said Teddy. Wearing on his another hat as the Founding President of HKU Business and Economics Alumni Association, Teddy expressed his devotion to the Faculty: “it is my honor to be the alumni representative. I am calling all FBE alumni to support this meaningful Alumni Corporate Ambassador Programme, and contribute to our alma mater”.

Originally from Sri Lanka, Udara successfully started his career as one of the few elite international Management Trainees at New World Development. “The Faculty offered me the opportunities to learn business in the backdrop of a world-class city, and it also prepared me to move into an ecosystem of the huge corporate world,” Udara said, “with the support and guidance from mentors and senior alumni, an international student like myself can blend in perfectly and develop my career goal here in Hong Kong. I am very grateful. This Alumni Corporate Ambassador Programme provided me with a great chance to give back to the Faculty, and to work with fellow alumni to empower the FBE community.”

Interested in joining Teddy and Udara to become FBE Alumni Corporate Ambassadors?  Please visit www.hkubs.hku.hk/go/aca for more details.

Dr. He Michael Jia, Assistant Professor of Marketing, Faculty of Business and Economics, has won the Research Output Prize (ROP) 2018-19, which is a Faculty-based award to honour the best research output from each Faculty.  This year, ten Research Output Prizes are conferred on the authors by the Faculties. 

The paper earned Dr. Jia this award was "Do Consumers Always Spend More When Coupon Face Value is Larger? The Inverted U-Shaped Effect of Coupon Face Value on Consumer Spending Level", which was published in the Journal of Marketing in 2018. While it is commonly expected that a larger coupon face value would incentivize consumers to spend more, this paper presented the conditions in which the relationship between coupon face value and consumer spending level did not take a positive form, rather, it was an inverted U-shape.

The research made an important first attempt to examine how coupon face value influences consumer spending level in the context of using a coupon for different products within the same product line of a brand. The findings provided advices for marketing practitioners with a contingency approach for effectively managing the face value of a product-line coupon to avoid the negative consequence. Marketers can determine when they should offer product-line coupons with either a large or a moderate face value based on the research findings, depending on whether the relationship between coupon face value and consumer spending is simply positive or inverted U-shaped.

Reference:

[1] Research Output Prize Winners 2018-19

[2] Jia, He, et al. "Do Consumers Always Spend More When Coupon Face Value is Larger? The Inverted U-Shaped Effect of Coupon Face Value on Consumer Spending Level." Journal of Marketing 82.4 (2018): 70-85.

From Literature to Finance

How Dr. Fang becomes a scholar in finance is a tortuous path. While Dr. Fang is interested in literature and history, life had cracked a joke to him by making his dream university admitting only non-arts stream students from his home town that year. As economics is relatively close to his interests, Dr. Fang has become a business student. This has turned out to be a wise choice, as it enables Dr. Fang to meet up with his mentor, Professor Lu Ming down the road.

‘Professor Lu Ming is a very passionate scholar. Interacting with him has stimulated me intellectually. He has a strong power to encourage people to follow his footsteps. That is why I would want to become a scholar.’

In addition to the influence of his mentor, the academic culture of his Alma Mater has encouraged intensive and fruitful discussions on the macroeconomic issues and structural problems of the Chinese economy. Dipped in a hotpot of knowledge for 4 years has eventually transformed Dr. Fang into an enthusiast of knowledge creation.

When asked whether he has thought of venturing to the private sector someday, Dr. Fang believed that academia has a better fit with him. Being a scholar is free. The academia grants you full liberty in choosing your research topic. It is something the private sector could hardly offer.

The puzzling exchange rates

The exchange rate is a heated topic in the press almost every day. While it draws attention from all sections of the society, we are still far from understanding of exchange rate movements thoroughly. It appears to be related to everything but at the same time, it seems to move on its own—disconnected from most fundamental variables we can think of.

Newcomers in the realm of research are always preying eyes on puzzling questions. The first research paper produced by Dr. Fang is to investigate the relationship between financial intermediaries and the exchange rate. Dr. Fang observes that the institutions are dominantly involved in the foreign exchange. These institutions are different from what traditional literature described as representative agents. Different institutions have their own behavioral patterns and they are subject to their own constraints. How these diverse institutions impact the exchange rates is something Dr. Fang really interested in.

Preferences for real-world research

As a researcher specialized in macroeconomics and finance, Dr. Fang has been paying attention to news featuring changes in the financial markets. Dr. Fang points out that as scholars research real-life issues, their research focus should also change flexibly in tandem with the real world. He has strong interests to interact with market participants, policymakers and regulators on how they think and view the market. These will be valuable experiences for him as a scholar and as a curious person. Meanwhile, he wishes to contribute his wisdom to society through these interactions.

Learn naturally, teach naturally

Despite Dr. Fang will only start teaching in the second semester, he is no stranger to pedagogy. When Dr. Fang was studying his PhD in the US, he had been a teaching assistant responsible for small class sessions that encompassed more than 90 students. Dr. Fang considered in-class activities fun and interactive.

Unlike secondary school where the teachers will keep pursuing you to hand in your assignments in time, the University gives students free reigns over themselves on resource allocation. There is no right or wrong on how one decides to spend their time but the key is to know what you want in life. The 4 years of undergraduate studies are the best period to fathom your future. Believing that your life is your own, Dr. Fang prefers to encourage the students to find their own path.

How to excel in undergraduate and postgraduate studies

Being good in an undergraduate does not necessarily mean that you are fit to be a researcher. Postgraduate research focuses on a very narrow topic for you to dig deep. Unlike undergraduate, studying postgraduate research allows you to read a wide range of literature and communicate with all the great minds. Dr. Fang observes that a lot of high performing undergraduates often cannot bear the boredom of performing repetitive and monotone tasks, such as drawing all the possible variations of an economic model you developed and dealing with tedious data details.

In addition, the research could be painful, long, and lonely. Sometimes not even your adviser can help you as you are the pioneer in that particular subject. Therefore, it is important to find someone to work with, or at least have someone to talk to in order to reduce the loneliness. Dr. Fang also stresses that failure is often. While sometimes you can turn failures into success, sometimes you cannot. If you cannot reverse the situation then let it, it is already a sunk cost. Failure and success cannot be compared on equal but it is definitely a part of life. No man can escape and should escape from failure. All we have to do is to maintain a peace of mind.

What to do After Getting Your Grad Job?

Dr. Fang believes that while different people make very different choices in career paths and lifestyles, fresh grads should always keep learning and educating themselves as it is beneficial in the long run. 

Dr. Fang emphasizes that we are living in a world of great changes and knowledge evolves so quickly. What students learn in universities can grow out of date quickly, but the ability and desire of lifelong learning are what really keep them with or even ahead of the rapid changes. After all, knowledge insignificant today may be useful and important in the future.”

Way forward

Been through the process of postgrad and undergrad, Dr. Fang greatly understands the difficulties students are facing. Therefore, joining HKU, Dr. Fang aims to utilize his experience and give a hand to students at all levels. In terms of research, Dr. Fang hopes that he could contribute to the community and tries his best to produce quality research.

Dr. Sara Kim, Associate Professor of Marketing, Faculty of Business and Economics was recognised as one of the winners of the Outstanding Young Researcher Award (OYRA) 2018-19. The award aims to recognise young researchers for their outstanding research accomplishments at the University of Hong Kong.

Dr. Kim has made a great impact in her research. She has been collaborating with different companies in China and Korea to put her research findings into practice.

When talking about her research, Dr. Kim said, “I have built a new area examining computerised helpers in mobile games and education software. My research also provides new insights on prosocial behaviour and service marketing. For instance, two of my papers provide important insights on the development of digital assistants for marketers, software designers, and educators. I am also collaborating with two Korean companies to implement real world business strategies based on my findings in these papers. I also collaborated with a Chinese e-commerce firm to implement service strategies for their frontline employees.”

OYRA is determined on the basis of documented evidence of international recognition of research accomplishments, quality and quantity of research publications, ability to compete for research grants, taking into account the prestige of the funding bodies and the size of the grants awarded, and impact of the research work. Only applicants under age 40 will be considered.

Dr. Kim’s research focus is on consumer and managerial decision making and its implications for marketing management. She is particularly interested in antecedents of consumers’ sense of self, including self-affirmation, identity threats, mortality salience, and implicit theories of personality, and the impact of consumers’ sense of self on various consumer judgments and behaviours such as consumer emotions, word-of-mouth, prosocial behaviour, and anthropomorphism. Her work has appeared in renowned publications such as Journal of Consumer Research and Psychological Science, and reported by international media such as New York Times, Time, Science Daily, and Medical News Today.

To success, be unique

Dr. Wang’s interests in the transfer and creation of knowledge were germinated since young. As a practical person keen on knowledge with high application value, midway through his undergraduate years, Dr. Wang had changed his undergraduate major from Biology to Computer Science, a discipline which guarantees scholars plentiful collaboration opportunities with the real business world.

Compare with private research institutions that focus specifically on problems faced by the company or its attached industry, Dr. Wang believes that the academic route suits him better as scholars enjoy more liberty in topic selection. This could satiate his thirst for meeting up and learning from people from all walks of life. Therefore, Dr. Wang has decided to become a scholar after accomplishing his master's degree.

The competition for academic posts is fierce. Dr. Wang believes that while skills in acquiring high grades in undergraduate courses are irrelevant to research, it is, unfortunately, a prerequisite to enter academia. Therefore, in order to be a successful researcher, students must develop skills that are desirable and rare in the field. Dr. Wang himself, for example, possesses uncanny skills in data analysis, a skill that is highly prized by both academia and the private sector. This has offered Dr. Wang lots of opportunities to engage in all sorts of collaborations and consultation projects over the years, allowing him to develop concrete practical experiences and prestige in academia.

Competition mania

Over the years, Dr. Wang has participated in over 30 IT and business-related competitions. Participating in competitions is very important as it enables students to apply theories on authentic data from private firms. Dr. Wang himself, for example, develops all his unique data analytical skills through participating in competitions. As researching on IT knowledge and developing new IT products often requires live data from private firms, Dr. Wang believes that these competitions are excellent warm-ups for students aspired to develop an IT career.

Competition experiences could also enable students to develop a better understanding of the industry. In the future, either they have chosen to become a scholar or work in the private sector, their research and projects will be relevant and useful.

To Dr. Wang, participating in competitions not only allows him to learn new knowledge from other contenders but being overwhelmed by a competitive atmosphere also gives him a mental time-out.

AI and debt collection

Dr. Wang shared his experience in developing an AI specialized in debt collection. The debt-collecting industry has always been facing a disequilibrium. While calling for debts already entails a lot of work, most debt-collecting agencies also lack the manpower to operate efficiently. However, as Dr. Wang’s AI could group debtees with good repayment records and calculate the best time period and frequency to make reminders, a lot of time is freed up for staff to pursue debtees with poor repayment records. It is believed that this AI could greatly boost the productivity of debt-collectors. As the US alone has more than USD 600 billion of debt accumulated among its households, the research of Dr. Wang has become a game-changer in the market.

IT giant vs IT entrepreneur

When asked whether students should work in an IT giant or become an IT entrepreneur, Dr. Wang believes that it depends on the student’s personality. Working for an IT giant offers one a quality life and a successful career prospect in the IT industry. But becoming an IT entrepreneur, however, is very risky and arduous.

Not only IT entrepreneurs on average have lower pay than employees of IT giants, but they also have to deal with a buffet of miscellaneous, non-IT related problems such as office rent. Although there is a one in a million chance for an IT entrepreneur to become the second Bill Gates, chances are that your start-up will either go bankrupt before taking off, and your entrepreneurial ambition will be gradually whiled away by the mundane desire to achieve break-even. At the end of the day, the road of entrepreneurship attracts both the foolish and the wise.

Way forward

Dr. Wang observes that the AI community in Hong Kong is small and is yet to be well-developed. Joining HKU, Dr. Wang aims to utilize his connection with the private sector to create more internships for HKU students in order to strengthen their knowledge in AI and hone their technical expertise. Through attracting talents around the world and keeping up the cutting-edge research level of HKU, Dr. Wang is optimistic that Hong Kong would remain relevant in the era of data.

The craftsman of knowledge

From Medicine, to Marketing, to Economics, and eventually settling down with Accounting, the uninhibited soul of Dr. Stice has prevented him to be satiated by routine work in the private sector, but to explore the further regions of knowledge and to become the herald of innovation. Years of exploring the vast ocean of business disciplines, has Dr, Stice reached the bottom of its marina trench. He then realized that accounting is the foundation of the modern financial market. It is what keeps companies to be ethical, and what encourages investors to have faith in the market. While mastering the accounting skill of data analysis would greatly facilitate one to further advancing their expertise in finance, understanding the inseparable bond between accounting and ethics could even guide one to the path of earning righteous and sustainable income. Always interested in producing general knowledge that could encompass the world, Dr. Stice has decided to dedicate his life on crafting jewels of business knowledge through tempering the rough stone of accounting.

Although private institutions also have research teams, Dr. Stice is not satisfied with focusing on narrow research topics within limited time. He loves to think and he thinks big. He aims to create knowledge that is applicable to the world. Dr. Stice views the collaborations with the private sector as working holidays as an academic, as a chance to put research findings into practice and observe how they operate in real life. After acquiring new knowledge, he prefers to return to the academia to further his research.

“You can’t do a research in a hedge fund or an investment bank for years! They will give you several hours to make a decision, or several weeks, or months to do a project. That’s all. That is all the time they can give you. The academia on the other hand is different. HKU for example, as long as your research is top-notched, you can have all the time in the world.”

The quintessence of knowledge creation

While many believes that the skills required to get good grades in undergraduate courses are different from the skills in research, Dr. Stice believes that only students who study to survive undergraduate courses would selectively work hard on exams and forgo all the knowledge after the semester ends. However, for students that are genuinely interested in learning, they will go extra mile to understand knowledge from multiple perspectives and discuss their findings with their teachers. These brainstorming activities could prepare an undergraduate student very well for PhD. However, Dr. Stice believes that students have to be more creative in their postgraduate studies as they are tasked to develop and explore ideas never been thought of in the history of human kind.

Other than the basics of ‘being passionate’, to enjoy the academic culture is also a crucial factor to survive academia. The academic culture refers to the endless reading of articles, exchanging of ideas and debating with other scholars. Scholars read what others think, develop their own views, and debate with other scholars on the same issue. Then, they return to their office with a refreshed mind and repeat the process again. After being intellectually stimulated for many years, a scholar may be able to melt down all these ingredients into a delicious stew. If you enjoy thinking, then the academia will be your pot of gold in the rainbow’s end. Since knowledge exchange is a crucial part in the academic culture, the more diverse the background of scholars, the more comprehensive and novel the knowledge produced. As HKU is one of the most internationalized academy in the world, Dr. Stice feels he has found his second home.

But on the dark side of the moon, failure and stress lurk. Publishing an article is very difficult. Top journals would usually have a rejection rate over 90%. It would be a huge deal if a professor ever managed to produce even one publication in a top journal throughout their career. As success is hard, Dr. Stice recommends novice scholars to effectively manage their expectations. On one hand, scholars have to be persistent and determined. You must have faith in your research and constantly believe that you are on the right path. By adjusting your view in such way, every morning you wake up, you would have the motivation to run the gauntlet, again.

On the other hand, one must not take career achievements as their only source of happiness. To Dr. Stice, happiness through workplace achievements are temporary but happiness from family and friends are perpetual. Therefore, it is important to take a break from research once in a while in order to stay mentally and physically healthy. Develop some hobbies could greatly alleviate your stress. Dr. Stice himself for example, engages in a regime of weightlifting and cardio exercises.

The pursue of round numbers

During the interview, Dr. Stice has shared with us his decade-long research work on why are humans fixated on rounded numbers. For example, when reading the financial statements, investors would always prefer to 100 billion instead of 99.5 billion, even though such amount is insignificant in the financial market. But in spite of the irrationality of worshiping rounded figures, companies who achieved them in their financial reports do attract more media coverage, more attention from institutional shareholders, and more analysts to follow.  

Unfortunately, the blind pursuit of the rounded figure also induces negative influences. Staff will eventually burn out and companies that have achieved rounded numbers for several years would eventually experience a slower growth in the long term. The market will then lost confidence on the firm’s expansion capabilities, making it increasingly difficult for the firm to solicit new sources of finance.

These conclusions are drawn based on analyzing all the listed companies that have ever existed since the birth of stock market. Dr. Stice has already developed a model to describe these human behaviors and we believe the research will be very interesting.

AI and the accounting career

Dr. Stice has observed that many accounting students are pessimistic with their future because of the development of AI. However, Dr. Stice posits that, what AI replaced is the duty of book keeping and that is conducive to the industry’s development. As accounting interns are freed from mechanical tasks, they can focus more on honing their skills in data analysis.

Dr. Stice believes that the value of accountants lies on their ability to interpret the financial statements and fathom follow-up strategies. Therefore, Dr. Stice believes that it is unnecessary for accounting students to develop a second major in computer science. After all, one does not need to have two majors to excel in life. The second major for students should be reserved for disciplines they are truly interested in. Selecting a major you are uninterested in is excruciating. Your performance is likely to be bad and all your time spent will be rewarded with barren harvest.

Another thing Dr. Stice wants students to bear in mind is that taking CPA does not mean that you have to be with accounting for better, for worse, for richer, for poorer, in sickness and in health. Accounting is the stepping stone in the business world. It could offer you the pathway to multiple industries. For example, as employees of the Big4 accounting firms have a lot of opportunities to analyse the financial records of different prestigious companies, it is therefore very common for Big4 accountants to develop their second career in their clients’ company.

The fundamentals of accounting

For students who are interested in developing a career in accounting, Dr. Stice stresses the importance of understanding accounting principles.

With regards to the principles, there are two schools of thought. Some believes that accounting numbers are facts. They come out from the accounting system and they are absolute. But some believes that accounting numbers are fabricated by manager to help them to get more bonus or to get a promotion.

Neither of them are correct, as accounting principles are executed flexibly in real life. People wants accounting principles to be flexible in order to leave room for mangers to exercise their judgement, and reflect the most accurate economic reality to the market. However, according to the agency theory, because of information asymmetry between mangers and shareholders, managers would always attempt to cheat more than they deserve. Therefore, the auditors of Big4 shoulders great responsibilities to ensure that the financial market is operating in an ethical and trust worthy manner. By striking a balance between the interests of shareholders and managers, auditors ensure that information in the market are credible enough to maintain customer confidence and incentivise investments.

Therefore, Dr. Stice is very active in the crusade of raising corporate awareness on the importance of business ethics and accounting. While he has been consulting and training personnel from countless prestigious financial institutions, his quest is far from over.

Way forward

Teaching in HKU for some time, Dr. Stice observes that students are not only intelligent but also possessing great leadership potential. Since no one knows all, no one will always be on the steering position. Therefore, a good leader is a good team player who could flexibly swap positions between leading and following. Dr. Stice also observes that students have good communication skills during negotiations and division of labour. He is confident that they will be great leaders in the future.

Other than teaching, Dr. Stice also greatly enjoys his research. Dr. Stice is greatly influenced and aspired by the Faculty’s ambition to become the best business school in Asia and even the world. He is excited about the challenges and opportunities ahead.

Knowledge X Family X Freedom

Since her undergraduate years, Dr. Qiu is already hooked up with knowledge production. Although she was majored in economics and finance, her mother’s professional background as an auditor had encouraged her to research on accounting. In addition, as the private sector does not guarantee liberty to its workers, the freedom that academics enjoy in research is another factor encouraging Dr. Qiu to become a scholar after graduation.  

Researcher 101

For students aspired to become a researcher, Dr. Qiu recommends them to attend more seminars and workshops. It is the best way for students to familiarize themselves with research topics that the academia focuses on. Dr. Qiu believes that talking to young professors is also conducive as they could provide students with the most updated information on the cultures of different research institutions and the merits of different post-graduate programmes.

While graduating with first-hon is stressful and hard, it pales in comparison with postgraduate research. As research work is a chronic battle, having adequate rest is very important to the physical and psychological health of researchers. Dr. Qiu herself would visit museums and listen to concerts when she need a mental time-out.

Finding someone to talk to also helps a lot. The academic path can be lonely as outsiders are unable to comprehend what you are going through and your difficulties or setback along the research journey. Therefore it is very important for PhD students to open up with one another in order to stay energetic. 

Accounting is beyond book-keeping

Producing financial statements is only part of an accountant’s job. The true worth of an accountant lies in his ability to interpret business data and to advise clients on making financial decisions capable of meeting the challenges today and making preparations for the future. Since AI have taken up the tedious data-entry work, accounting interns would have more time honing their skills in business analytics. By mastering the knowledge of accounting, one can open up multiple career paths. Other than being accountants and trust managers in investment banks, possessing knowledge in accounting would also give novice entrepreneurs a head start in managing their business.

Accounting knowledge could also enables us to make good decisions in life. While rudimentary knowledge such as book-keeping could nurture us to spend responsibly, advance knowledge such as evaluating investment return could enable us to purchase goods capable of generating perpetual gains.

Dr. Qiu further guides us to explore accounting by introducing us her research interests in corporate governance. Little known to laymen that maintaining corporate governance is also a duty for accountants. It is often overlooked by the public that auditors and tax officers bear great social responsibilities to ensure that firms are adhering to business ethics. As an accounting scholar, Dr. Qiu is interested to study how the shift in power balance will impact the incentives of the top management, and in the long run, how will it impact the companies’ capability in generating value to the society. Dr. Qiu observes that it has become a global trend in recent years that shareholders are increasingly influential in business operations. As the voting cost decreases, shareholders are more actively engaged in Say-on-Pay. Moreover, institutional investors are also playing an increasngly significant role in the shaping of top executives' remuneration plans. For example, shareholders in Disney had voted down the board’s decision in doubling the CEO’s bonus during the merger and acquisition deal with 21st Century Fox.

Way forward

As HKU is a prestigious institution well known for its resourceful network, Dr. Qiu hopes that she could leverage its prestige to participate on more consultancy projects. Dr. Qiu is particularly interested in researching the corporate governance of pharmaceutical firms and tech firms. As the CEO in these companies usually possesses technical expertise beyond that of the board and the shareholders, Dr. Qiu is intrigued to study their power dynamics. By getting inside the black box to observe their power dynamics, Dr. Qiu is aspired to contribute more empirical data to the academia.

Other than research, Dr. Qiu hopes that she could, as a young scholar, encourage more discussions in class and would make it easier for students to share with her the difficulties they are facing.

Janice Danier (4th from right) and her teammates won their case category.

Janice Danier, a Year 4 BEcon&Fin student, and fellow team members from other business schools, won their case category during the KPMG sponsored Team Case Competition at Beta Gamma Sigma’s Global Leadership Summit held in Chicago in late 2019. The team was selected as a winner based on their innovative solution for their assigned business case and the effectiveness of their presentation.

Also attending the event was Ji Ming Jung, a Year 4 BBA(Acc&Fin) student. During the 4-day summit, they both participated in specialised leadership trainings and team events hosted by BGS, and learned from the leaders in various fields of business and academia. They were also given many networking opportunities with recruiters from big companies and got the latest job market information firsthand.

Commenting on the summit, Janice said, “The sessions and speakers had definitely inspired me to develop my own passion, and develop skills outside of the classroom, that would help me differentiate from others and be a good leader in work environment. I also found having conversations with recruiters very useful in understanding more about the requirements that I might need for future enrollment.”

Ji Ming also found helping others to grow and to reveal their potentials at work is another approach of leadership that can drive business success, “I gained an idea of how I can further utilise one’s strengths, motivations and social styles for optimising results and the best work experience.”

The Beta Gamma Sigma’s annual Global Leadership Summit brings together nearly 400 BGS members to explore their talents while building relationships with fellow leaders from chapters around the world. During the Summit, attendees participate in a carefully cultivated series of leadership sessions designed to build upon each other to culminate in an intensive team competition.

Janice Danier (left) and Ji Ming Jung (right) participated in the Beta Gamma Sigma’s 2019 Global Leadership Summit.

About Beta Gamma Sigma

Established in 1913, Beta Gamma Sigma is an international honor society which operates exclusively for AACSB accredited business programs. Membership in Beta Gamma Sigma is highly selective, reserved for top students within the top 5% of business schools around the world. Members of Beta Gamma Sigma go on to lead—and even create—some of the largest and most successful companies around the globe. Beta Gamma Sigma has inducted more than 830,000 members worldwide since its founding in 1913.

In search of happiness

Professor Li originally planned to become an actuary as it was believed to be the best job for overall happiness. However, encountering the father of modern differential geometry, Shiing-Shen Chern, in a two-week research programme has become a turning point of Professor Li’s life. That experience has Professor Li addicted to knowledge production and realized that the freedom an academic enjoys is what he craves in life. Thereafter, Professor Li gleefully embarked on his academic journey.

Bengt Holmström, 2016 Nobel Prize Winner in Economic Sciences, and a member of Professor Li’s PhD committee member, is another impactful figure. Professor Holmström’s ability in observing the unobvious and his philosophical approach in research have encouraged Professor Li to become an economic theorist specialized in simplifying complex phenomena.

To see things clearly

The world is complicated and full of unknowns. Yet our brain is limited—psychologists suggest that our minds can only remember seven items on average, and the models we have about the complex world are necessarily incomplete and inaccurate. All economics models are wrong (in the sense that they cannot perfectly capture the reality), but some are better than others. Good economics model offer a perspective to see important facts that are ex ante surprising but ex post natural.

Being able to reckon the limitations of our analytical models marks the watershed between studying and researching economics. Undergraduate training enables one to utilize quantitative methodologies to understand the logic of the models but postgraduate research is beyond mathematical questions that are placed in a right-or-wrong dichotomy. Research is an art as it involves value judgement in the sense that it’s about deciding which aspects of the reality to focus on. Professor Li believes that the work process of economic theorists has a lot in common with that of artists, painters and poets in particular. The similarity does not merely lie in the fact that both involve creativity. More importantly, both struggle to represent the complex world using limited medium, be it an essay or a math formula. These limitations imply that art works and economic models are inevitably distortions of reality. The key decisions are therefore to decide which aspects of reality to sacrifice and which aspects highlight the more important and perhaps deeper truth of the world. If done well, one finds beauty in painting, in poems, and in economic models. Professor Li highly recommended books such as E.H. Gombrich’s Art and Illusion, and T.S. Eliot’s On Poetry and Poets.

A Research Odyssey

The research journey shared by Professor Li is his research on how firms should design their promotion protocols in order to attract, motivate, and retain talent, particularly when the growth rate of the firm fluctuates over time. As a short summary, the research concludes that the best promotion mechanism is a combination of first-come-first-serve and random allocation. Workers waiting for promotion are divided into two groups: a top group in which everyone (with the same ability) has the same chance of being promoted, and a bottom group in which no one can get promoted immediately, but wait to join the top group under the first-come-first-serve rule.

While the result is simple, it took Professor Li and his coauthors several years to derive it. In earlier stage of the research, Professor Li had included several additional variables (such as wages and bonuses) into the model. While these variables are realistic, they make the optimal promotion rule opaque and the analysis cumbersome. After being put in a standstill for a long time, Professor Li decided to exclude these variables. The exclusion allows him to focus on the heart of the problem, and in turn creating a streamlined model which produced a clear and simple result.

Way forward

As a creative organizational economist, Professor Li has always considered our body as an organization on his own. Realizing that creating an AI thinking like a human is a goal among machine learning scholars, out of interest in understanding the differences between the command structures of androids and humans, Professor Li has ventured into related fields. He has also shared some insights with us on the correlation of neural science and machine learning.

“When we are holding a cup of hot coffee, our hand will want to let go but our brain will force it to hold it. But if the coffee is too hot, our hand will bounce off upon contact nonetheless. Therefore, I believe that knowledge in neural science help us understand more on how machine learns”