Optimizing office environments for work efficiency and health of worker

Researchers examine the economic benefits of enhancing various elements in office spaces in Tokyo for improved work efficiency and health

Peer-Reviewed Publication

HOSEI UNIVERSITY

 

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RESEARCHERS FROM HOSEI UNIVERSITY, JAPAN, EXAMINE THE ECONOMIC BENEFITS OF ENHANCING VARIOUS ELEMENTS IN OFFICE SPACES IN TOKYO FOR IMPROVED WORK EFFICIENCY AND HEALTH

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CREDIT: SHUN KAWAKUBO AT HOSEI UNIVERSITY, JAPAN

The quality of the office environment significantly affects work efficiency and worker health. Therefore, creating and maintaining an optimal built environment in the office can be a key step in maximizing a company's economic growth. Previous research has examined how indoor environmental quality (IEQ), including elements like temperature, air quality, lighting, and noise, impacts work efficiency and worker health. However, these studies do not tend to focus simultaneously on work efficiency and worker health, nor do they quantify the economic benefits of optimizing office environments.

In a new study published on 1 September 2023, in Volume 243 of the journal Building and Environment, researchers from Japan investigated how office environmental elements impact work efficiency and worker health, while also analyzing the economic benefits of optimizing these elements. They surveyed 1644 workers in 29 office buildings in Tokyo, collecting data on the built environment through worker questionnaires and physical IEQ measurements. They then compared the perceived work efficiency (reported by workers) in offices to that in an 'ideal' office with maximum work efficiency to estimate the economic value provided by the built environment. Similarly, they looked at the extent of presenteeism (working while sick) and compared it to a scenario where workers faced no health-related barriers to work. The study, led by Professor Shun Kawakubo from the Faculty of Engineering and Design at Hosei University, Japan, included colleagues Shiro Arata and Masaki Sugiuchi from Hosei University, and others. 

The study found that participants perceived their work efficiency to be at an average of approximately 77%. Presenteeism varied, with some participants reporting no symptoms in the last 30 days, while others experiencing symptoms every day. The average decrease in performance due to presenteeism was approximately 34%. 

The effects of overall office environment elements on perceived work efficiency and presenteeism were examined in the study. A better overall office environment was associated with higher perceived work efficiency among workers. "Workers in offices with lower environmental performance had  low work efficiency, while those in higher-performing offices had high work efficiency. The 16.8-point difference in work efficiency between workers in offices with relatively good and poor environments equates to an annual economic benefit of about 1,039,000 JPY, highlighting the financial advantages of a good work environment," explains Prof. Kawakubo. Similarly, a better overall office environment was linked to lower performance loss due to presenteeism. Prof. Kawakubo notes, "The better the office environment, the lower the amount of loss due to presenteeism. The difference in annual economic loss due to presenteeism between workers in offices with relatively low environmental performance and workers in offices with relatively high environmental performance was 423,000 JPY."

The study also revealed that higher quality elements such as "interior and furnishings," "overall building sanitation," "airflow from HVAC (heating, ventilation, and air conditioning)," and "meeting space" were associated with higher perceived work efficiency. Elements like "disaster and emergency," "thermal environment," "lightning environment," and "telecommunication networks" were associated with lower economic losses due to presenteeism. The estimated economic benefits related to perceived work efficiency were greater than those associated with presenteeism.

The study concludes that offices can boost economic benefits, and underscores the global need for enhancing worker efficiency as well as employee health by developing good quality offices. “Today, companies around the world are reaffirming the importance of human capital. We believe that widespread recognition of the fact that investment in the creation of a good office environment is directly linked to maintaining and improving the health of office workers and increasing the productivity of the company as a whole, will contribute to the building of a healthier society,” concludes Prof. Kawakubo.

THE STUDY HIGHLIGHTS THE IMPORTANCE OF THE OFFICE ENVIRONMENT IN INFLUENCING WORK EFFICIENCY AND WORKER HEALTH AS ESTIMATED BY AN ANALYSIS OF PRESENTEEISM. THESE FINDINGS CAN ASSIST STAKEHOLDERS IN MAKING INFORMED DECISIONS WHEN DESIGNING OR RENOVATING OFFICE BUILDINGS AND CAN HAVE IMPORTANT ECONOMIC IMPLICATIONS FOR COMPANIES.

CREDIT

Shun Kawakubo at Hosei University, Japan

Reference

Authors: Shiro Arata1, Masaki Sugiuchi1, Toshiharu Ikaga2, Yasuyuki Shiraishi3, Tatsuya Hayashi4, Shintaro Ando3, Shun Kawakubo1

Title of original paper: Economic benefits of the effects of office environment on perceived work efficiency and presenteeism

Journal: Building and Environment    

DOI: 10.1016/j.buildenv.2023.110712

Affiliations:    
1. Department of Architecture, Faculty of Engineering and Design, Hosei University, Tokyo, Japan
2. Department of System Design Engineering, Faculty of Science and Technology, Keio University, Kanagawa, Japan
3. Department of Architecture, Faculty of Environmental Engineering, The University of Kitakyushu, Fukuoka, Japan
4. Department of Architecture, Faculty of Engineering, Chiba University, Chiba, Japan

About Professor Shun Kawakubo
Shun Kawakubo is currently a Professor at Hosei University’s Department of Architecture. Professor Kawakubo has published many scientific articles in subjects including sustainability science and built environmental engineering. As a broad goal, his engineering research aims to facilitate the creation of “cities of the future” that aid in advancing the United Nations Sustainable Development Goals (SDGs).

About Hosei University
Hosei University is one of the leading private universities in Tokyo, Japan. The university offers international courses in many disciplines and has a long and rich history. Hosei University was founded as a school of Law in 1880 and evolved into a private university by 1920. 
It is also home to multiple research centers, which conduct advanced research on various fields, including nanotechnology, sustainability, ecology, and more. 
The university has three main campuses—Ichigaya, Tama and Koganei, located across Tokyo. 
For more information please see: https://www.hosei.ac.jp/english/

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DOI

10.1016/j.buildenv.2023.110712 

METHOD OF RESEARCH

Survey

SUBJECT OF RESEARCH

People

ARTICLE TITLE

Economic benefits of the effects of office environment on perceived work efficiency and presenteeism

New resource gives business leaders a blueprint for optimizing equitable employee health and well-being

The Health Equity in the Workforce collaboration among the American Heart Association, the Deloitte Health Equity Institute and the SHRM Foundation shares an actionable strategy map for employers to positively impact the health of their workforce

Business Announcement

AMERICAN HEART ASSOCIATION

DALLAS, November 1, 2023 — Health outcomes research has shown that workers in the U.S. experience inequitable health and well-being, with significant variations in the burden of chronic disease, mental health conditions, food insecurity and more across populations, even among those covered by employer-sponsored insurance.[1], [2] Recent studies demonstrate how the workplace can serve as a social driver of health, impacting the risk of conditions such as high blood pressure and heart disease.[3], [4] This growing body of evidence underscores the need to equip employers with tools and resources to positively influence the health and well-being of their workforce.[5]

To help bridge this gap, the American Heart Association, a global force for healthier lives for all, today released the Health Equity in the Workforce Employer Resource Guide, developed in collaboration with the Deloitte Health Equity Institute and the Society for Human Resource Management (SHRM) Foundation. This new resource aims to increase employers’ understanding and adoption of health equity in the workplace to help all employees reach their full health potential.

The guide includes an overview of how health inequities can manifest in the workplace and the role of the employer, as well as actionable strategies, economic insights and guidance on measuring progress. Expanding on the foundational work of the Association’s CEO Roundtable in support of the 2024 Health Equity Impact Goal, the guide delves deeper into the practical implementation of health equity policies and practices and the potential impact on workforce health and business performance.

“The American Heart Association is committed to championing health equity through every means possible, including activating employers to drive change in the workplace,” shared Gerald Johnson, American Heart Association EVP, Office of Health Equity and chief diversity officer. “Mounting evidence has highlighted the inequitable experience of health and well-being in the U.S. workforce, and the implications this has for both employees and employers. Organizations at the forefront of this movement that commit to actively dismantling barriers to health for employees will reap the benefits of increased trust, engagement and strengthened business outcomes.”

A future of health equity is one in which everyone has an optimal and just opportunity to be healthy, with intentional consideration for those at greatest risk of poor health. Optimizing the workplace so that all employees can thrive is not only a moral imperative, but also supports continued business success. Through intentional efforts to align benefits, policies and programs with equity considerations, employers can play a vital role in helping achieve zero gaps in health outcomes.[6]

“Our research shows that employers have an important role to play in helping to advance health equity, and benefit design is just one aspect where business leaders can drive meaningful change for their workforce,” said Kulleni Gebreyes, M.D., Deloitte U.S. Life Sciences and Health Care Consulting leader and chief health equity officer. “Through this collaboration with the American Heart Association and SHRM Foundation, we hope to empower employers with the resources to embed health equity into strategies and solutions that can improve the health and wellbeing of all their employees.”

"This health equity resource guide is just the next step in a critical campaign that the SHRM Foundation is taking part in," said Wendi Safstrom, president of the SHRM Foundation. "Our research showed that more than half of U.S. workers (53%) are likely to leave their current job if offered a new job with significantly better mental health benefits. This guide helps leaders bridge that gap."

The Health Equity in the Workforce collaboration provides employers with actionable strategies to help ensure that their health and well-being benefits, policies, and programs result in equitable outcomes for all employees. An employee-centric, equity minded approach can also help strengthen employee engagement and retention, build consumer trust, and support talent attraction in today’s competitive market.[7], [8], [9] The initiative is powered by the American Heart Association’s Well-being Works Better™ platform, which helps business leaders unleash the power of a healthy, happy workforce.

Visit heart.org/workequity to access the Employer Resource Guide and learn more.

Additional Resources:

• Multimedia is available in the right column of the release link.
• Spanish news release will be added as available. 
• AHA news release: Equipping employers to address costly health inequities, improve workforce well-being
• Follow AHA/ASA news on X (formerly known as Twitter): @HeartNews

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Rethinking quality: UNU-convened experts challenge the harmful influence of global university rankings

Business Announcement

UNITED NATIONS UNIVERSITY

Kuala Lumpur, 1 November 2023

An Independent Expert Group (IEG) convened by the United Nations University’s International Institute for Global Health (UNU IIGH) has released a strong statement criticizing the wide and uncritical use of global university rankings.

The IEG highlights the vital importance of universities in delivering not just education, training, and research, but also in shaping public policy, promoting informed public discourse, and helping advance democracy and human rights.

However, although marketed as a tool for improving university performance and providing information to prospective students, the statement describes how global university rankings lead to a variety of perverse behaviours and negative impacts that undermine key aspects of the mission of universities.

According to IEG member Marion Lloyd, a research professor at the Institute for the Study of the University and Education at the National Autonomous University of Mexico, “Global university rankings exert too much influence over higher education, promoting a narrow and simplistic version of success that overlooks many of the rich and vital contributions that universities make to society”.

The Problem with Rankings

The IEG statement highlights nine problems with global university rankings. 

Key among them is that the very idea of global university rankings is fundamentally flawed. It is simply not possible to produce a fair and credible global league table of universities given their multiple missions and their diverse social, economic, and political contexts around the world.

Because there is no adjustment made for the resources available to universities, rankings inevitably advantage historically-privileged institutions and help perpetuate global inequalities in higher education instead of raising academic standards equitably and universally. “It is not appropriate for universities from historically exploited and disadvantaged regions to feel compelled to compete on an un-level playing field with a set of rules that are biased in favour of the Global North” stated Akosua Adomako Ampofo, Professor of African and Gender Studies at the University of Ghana.

Moreover, the methodologies employed by the major rankers are opaque, while demonstrating a clear bias towards the English language, certain types of research, and STEM subjects (Science, Technology, Engineering, and Mathematics). This undermines the importance of teaching and of the humanities and social sciences. Disturbingly, the lack of transparency over the data and scoring systems employed raises serious doubts about their reliability and objectivity. 

“These rankings perversely incentivise universities to prioritise short-term and sometimes unethical interventions to improve their rankings, rather than the needs of their students, staff, local communities, or of society more generally” stated Marion Lloyd, adding that “the constant and short-sighted obsession with annual rankings comes at the cost of long-term and broader goals, which is especially harmful given the many serious and complex problems facing society”.

The IEG statement also highlights the extractive nature of major global rankings and the fact that the rankings industry is dominated by private businesses whose fundamental mission is to produce profits. According to UNU-IIGH’s Professor David McCoy who helped convene the IEG, “Many of the commercial practices of the rankings industry are simply not in the public interest and result in significant resources being diverted away from core academic functions”.

A Call to Action

The IEG  calls for a better understanding of the flaws and limitations of global university rankings and for the adoption of better alternative ways to assess and describe the unique and specific attributes of different universities. It also encourages universities to disengage from the costly and extractive practices of the rankings game and to diminish the influence of unaccountable commercial organizations on higher education.

Read the full statement on this link: https://doi.org/10.37941/PB/2023/2 

Media Contact:

For media inquiries or interviews with the authors, please contact:

Gopi Kharel

Knowledge Management and Communications Manager

UNU- International Institute for Global Health

Email: gopi.kharel@unu.edu

***

About the Independent Expert Group (IEG):

The IEG is a diverse group of experts convened by the United Nations University International Institute for Global Health to critically examine and address the impact of global university rankings on higher education. Its members come from various fields and backgrounds, working collectively to bring about positive change in the sector. See the bios of the experts at the annex of the statement. 

Note to Editors: High-resolution images and additional expert quotes are available upon request.

 

Appendix: Global University Rankings - Key Facts for Journalists

1. The first global university ranking was published in 2003.
2. The number of producers of global and other university rankings has grown constantly over the past two decades, with more than 60 global and regional rankings produced in 2023. For some, ranking universities has become a highly profitable business.
3. The most influential global rankings are produced by 4 private companies: the UK-based Times Higher Education (owned by Inflexion Private Equity Partners LLP) and Quacquarelli Symonds; the American U.S. News & World Report; and Shanghai Ranking Consultancy from China.
4. There are currently ca. 21,000 accredited or recognised higher education institutions in the world. The most comprehensive global university rankings, however, include up to around 2,000 institutions, located in roughly 100 countries.
5. The Top 100 in the global rankings by QS, Shanghai Ranking Consultancy, and THE are largely fixed. Very few new institutions ever enter the ‘top’, although universities may shift positions within that range.
6. Major global university rankings privilege wealthier and research-oriented institutions from the English-speaking countries of the Global North, which comprise the majority of those ranked in the top 100.

The business behind rankings

1. None of the 4 major global university rankings disclose how their scores are calculated.
2. Recent research suggests that universities that buy products and services from QS and THE may have better chances of moving up in those rankings.
3. The 4 major global rankings rely on Elsevier's and Clarivate's proprietary bibliometric data. This further strengthens the two companies' already dominant position in the academic publishing and data analytics markets. Elsevier's profit margin is almost 40% (with over $3 billion in annual revenue), rivalling that of Apple and Google.
4. QS, THE, and U.S. News collect vast amounts of data from universities and publicly accessible sources, which they then privatise in order to market them to universities, governments, and other interested parties in the form of performance analytics.
5. By progressively enlarging the number of universities included in their rankings, major ranking organizations also expand the market of prospective buyers of their data products, analytics, and consulting services—which is key to their business model.
6. Ranking companies that also sell consulting services to universities and governments are in the position of conflict of interest.

Methodological issues

1. The academic community generally agrees that global university rankings are methodologically flawed.
2. Global university rankings offer a dramatically simplified and unrealistic view of university performance, which gives a skewed idea of what universities' functions and activities are, thus misleading prospective students.
3. Rankings exaggerate the actual differences between the ‘quality’ of universities, as small variations in scores can result in radically different positions in the ranking.
4. 50% of the total score in the QS World University Rankings is based on a survey of subjective opinions provided by anonymous individuals. In the case of Times Higher Education's World University Rankings and the U.S. News Best Global Universities, subjective opinions make up 33% and 25% of the total score, respectively.
5. 60% of the total score in the Shanghai Ranking is based on publications and citations, while the number of Nobel Prizes and Field Medals weighs 30%.
6. In QS and THE global rankings, the weights assigned to different indicators can change every few years. The methodological reasoning behind these adjustments is not fully disclosed.
7. QS, THE, and U.S. News use different methodologies to calculate their global, regional, and national rankings. As a result, the same university can be ranked the 2ndbest in its region in the QS World University Ranking, while being 7thin the regional ranking published by QS in the same year.
8. Rankings can in some cases be highly volatile. It may take only 1 highly cited researcher joining the faculty for a university to climb 100 places in Times Higher Education´s World University Ranking.

Pressure and incentives

1. Participating in a global ranking can put enormous pressure on universities, sometimes requiring significant human and financial resources. This places universities and governments with limited budgets even more at a disadvantage.
2. University rankings give universities a large incentive to manipulate the data, misrepresent key statistics, and fabricate false information about their performances.
3. The number of universities withdrawing their participation from various rankings has increased dramatically in the past few years.

 

NEA award supports study of music therapy to improve chronic pain

Grant and Award Announcement

REGENSTRIEF INSTITUTE

INDIANAPOLIS -- Regenstrief Institute research scientist Matthew J. Bair, M.D., M.S., and the Indiana Institute of Medical Research (IIMR) at Richard L. Roudebush VA Medical Center have been awarded the Creative Forces®: National Endowment for the Arts Military Healing Arts Network Award for Clinical Study of Music Therapy and Chronic Pain in U.S. Veterans.

The research project titled “Stepped-Care Intervention of Music and Imagery to Assess Relief (SCIMITAR) Trial” will test whether a two-step music therapy intervention improves pain, psychological symptoms (anxiety, PTSD, depression and stress) and health-related quality of life in veterans with chronic musculoskeletal pain. The study will also assess opioid use among participants and provide a cost-benefit analysis of step 1, music listening, and step 2, music imagery, interventions.

Dr. Bair is director of the U.S. Department of Veterans Affairs Health Services Research and Development Center for Health Information and Communication (CHIC). He is also a professor of medicine in the Division of General Internal Medicine and Geriatrics at the IU School of Medicine.

The National Endowment for the Arts (NEA), in partnership with Henry M. Jackson Foundation for the Advancement of Military Medicine (HJF), Inc., announced that the clinical research award of $900,000 will be awarded to the IIMR, which is collaborating with the VA as part of the Creative Forces®: NEA Military Healing Arts Network. Dr. Bair, a health services researcher and internist, and Kristin Maya Story, PhD, a music therapist and CHIC core investigator, are the co-principal investigators.

Creative Forces is an initiative of the NEA in partnership with the U.S. Departments of Defense and Veterans Affairs that seeks to improve the health, well-being and quality of life for military and veteran populations exposed to trauma, as well as their families and caregivers. HJF will manage the award to support a randomized controlled trial of music therapy for U.S. veterans with chronic pain.

Through Creative Forces, the NEA is investing in research exploring the physical, social and emotional impact and benefits of creative arts therapies.

Matthew J. Bair, M.D., M.S.
In addition to being a research scientist with Regenstrief Institute, Matthew J. Bair, M.D., M.S., is the director and principal investigator for the Veterans Affairs Health Services Research and Development Center for Health Information and Communication, Richard L. Roudebush VA Medical Center. He is a professor of medicine at Indiana University School of Medicine.

About Regenstrief Institute
Founded in 1969 in Indianapolis, the Regenstrief Institute is a local, national and global leader dedicated to a world where better information empowers people to end disease and realize true health. A key research partner to Indiana University, Regenstrief and its research scientists are responsible for a growing number of major healthcare innovations and studies. Examples range from the development of global health information technology standards that enable the use and interoperability of electronic health records to improving patient-physician communications, to creating models of care that inform clinical practice and improve the lives of patients around the globe.

Sam Regenstrief, a nationally successful entrepreneur from Connersville, Indiana, founded the institute with the goal of making healthcare more efficient and accessible for everyone. His vision continues to guide the institute’s research mission.

About the Creative Forces Initiative 
Creative Forces®: NEA Military Healing Arts Network is an initiative of the National Endowment for the Arts in partnership with the U.S. Departments of Defense and Veterans Affairs that seeks to improve the health, well-being, and quality of life for military and veteran populations exposed to trauma, as well as their families and caregivers. Creative Forces is managed in partnership with Americans for the Arts, Civic Arts, the Henry M. Jackson Foundation for the Advancement of Military Medicine, and Mid-America Arts Alliance. More information can be found at arts.gov/creativeforces and creativeforcesnrc.arts.gov or follow us on Twitter, Facebook, Instagram, and LinkedIn.

About the National Endowment for the Arts 
Established by Congress in 1965, the National Endowment for the Arts is an independent federal agency that is the largest funder of the arts and arts education in communities nationwide and a catalyst of public and private support for the arts. By advancing equitable opportunities for arts participation and practice, the NEA fosters and sustains an environment in which the arts benefit everyone in the United States. To learn more, visit arts.gov or follow us on Twitter, Facebook, Instagram, and YouTube.

 

Research team at World Institute of Kimchi discovers lactic acid bacteria strains with high virus resistance from kimchi

Identification of genetic traits of the kimchi lactic acid bacteria strains with strong virus defense

Peer-Reviewed Publication

NATIONAL RESEARCH COUNCIL OF SCIENCE & TECHNOLOGY

 

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KIMCHI LACTIC ACID BACTERIA WITH A HIGH LEVEL OF RESISTANCE TO PHAGE

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CREDIT: THE WORLD INSTITUTE OF KIMCHI

Researchers at the World Institute of Kimchi have isolated lactic acid bacteria (LAB) strains with high levels of resistance to phages from kimchi fermented at low temperatures for a long period of time. They have also identified the defense mechanism of the LAB strains against phages, viruses that infect and replicate within bacteria.

Kimchi, a traditional Korean food, is a lactic acid-fermented vegetable product. Unlike fermented dairy products, which are produced under a sterilized-closed fermentation system, kimchi is produced through spontaneous fermentation initiated by various microorganisms present in the raw materials under a non-sterilized-open fermentation system. Thus, various LAB can be involved in kimchi fermentation, and the diversity of the dominant LAB and the periods during which they are dominant differ depending on the environment.

To identify the genetic traits of kimchi LAB in long-term fermented kimchi stored at low temperature, researchers at the World Institute of Kimchi collected 34 samples of kimchi fermented for more than 6 months at low temperatures of -2 to 10℃ from all over South Korea. In more than 88% of the collected kimchi samples, a specific LAB strain, Pediococcus inopinatus, was found to be the dominant species. Through whole-genome sequencing analysis, the researchers found that P. inopinatus has a very well-developed clustered regularly interspaced short palindromic repeat (CRISPR). CRISPR is a prokaryotic adaptive immune system composed of a combination of several genes depending on the LAB strain.

Specifically, the P. inopinatus strains possess additional copies of the csa3 gene, the gene coding for the transcription factors for the cas genes, compared to other LAB strains. Also, due to the active expression of cas genes, P. inopinatus strains store much more genetic information about phages. Therefore, after the first phage infection, P. inopinatus will be more effective in preventing subsequent infection with similar phage. The kimchi industry has been using kimchi LAB as a starter for the production of standardized kimchi with better sensory qualities. Just as humanity is threatened by the COVID-19 virus, these starters are also at risk of infection from phages. Therefore, the development of phage-resistant LAB strains is necessary. Additionally, among the kimchi LAB reported in this study, one LAB strain had a gene sequence that could play an immune role not only against phages but also against mammalian viruses.

Dr. Hae Choon Chang, President of the World Institute of Kimchi and the corresponding author of this study, said, “P. inopinatus possesses a unique, well-developed CRISPR system that can defend against a variety of viral invasions.” She also stated, “We are planning to study the antiviral activity and analyzing the immune spectrum of P. inopinatus, and we expect that the excellent antiviral ability of these kimchi LAB strains can be used not only in food but also in the pharmaceutical industry.”

The results of this study were published in the online edition of the September 2023 issue of Food Microbiology, an international journal dealing with all aspects of the microbiology of foods.

 

 

 

※ Paper title: Pediococcus inopinatus with a well-developed CRISPR-Cas system dominates in long-term fermented kimchi, Mukeunji (IF 5.3)

- Authors: (Corresponding author) Hae Choon Chang, PhD (first author) So Yeong Mun, PhD and Wooje Lee, PhD

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JOURNAL

Food Microbiology

DOI

10.1016/j.fm.2023.104385 

ARTICLE TITLE

Pediococcus inopinatus with a well-developed CRISPR-Cas system dominates in long-term fermented kimchi, Mukeunji

 

Open the floodgates: Internal crowdfunding fosters innovation and engages employees

Peer-Reviewed Publication

KÜHNE LOGISTICS UNIVERSITY

 

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CHRISTINA RAASCH IS PROFESSOR OF DIGITAL ECONOMY AT KÜHNE LOGISTICS UNIVERSITY.

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CREDIT: KLU

In a several-round-long crowdfunding initiative, the employees of Siemens AG not only had the opportunity to present their own ideas on an in-house online platform; in the role of investors, they were also able to choose which projects to implement. In other words, they had a chance to do things normally reserved for managers: make decisions and allocate budgets. The researchers assessed how well this distributed decision-making approach worked and the corresponding role of hierarchies. Their conclusion: “Employees submitted high-quality ideas, which their colleagues recognized and financially supported,” says Christina Raasch, a Professor of Digital Economy at KLU and researcher at Kiel Institute for the World Economy (IfW).

However, these investors weren’t wholly unbiased; they tended to support the ideas of employees at their own hierarchical level. As Raasch explains: “Similarities with the person who submitted it increased their identification with the idea and promoted a sense of group identity, leading to a more positive evaluation.” And the more innovative the idea was, the more pronounced this effect was. In contrast, when investors and creators were competitors, the amounts invested tended to be smaller.

Tapping hidden know-how and fostering employee loyalty

Nevertheless, at the end of the day, the advantages of idea competitions with distributed decision-making are self-evident: They allow in-house know-how that is distributed throughout the company and perhaps going to waste to be tapped, while also promoting exchanges and collaboration across internal borders. “In addition, we observed that employee loyalty and motivation improved when their ideas were appreciated and their decisions were respected – the management had no veto power,” Raasch reports. Further, the approach helps to manage larger numbers of ideas, since there are more shoulders to bear the burden.

Viable paths to joint innovation

To ensure that companies and employees alike reap the maximum benefits of internal crowdfunding, the processes involved have to be carefully thought through and adapted to the company in question. To ensure the investors aren’t overwhelmed with too many ideas, larger companies should form smaller groups of creators. The management has to stand behind the idea of putting decision-making power in the hands of employees – and can’t snatch it back later. It also needs to be clear where the money the investors are meant to allocate comes from. In most cases, creators want to present their idea together with their own name. Christina Raasch explains why: “This kind of visibility boosts motivation and satisfaction for everyone involved – which is more important than any minor skewing affects in the evaluation.”

Any company that wants to be innovative and foster new ideas also has to ensure that, if an idea fails, it has no negative consequences for either the creator or the investors; rather, it has to be part of the company’s learning culture. After all, innovations always involve a degree of risk. Another important factor is whether or not investors are anonymous: When investors’ identities are known, they tend to evaluate more thoroughly, but are also more cautious and could be put under pressure by creators. “Another possibility would be to only reveal the identities of the investors for ideas that are implemented,” Raasch suggests. “But I normally recommend permanent anonymity to avoid any potential fallout for investors.”

How the study was conducted

Since 2015, Siemens has implemented nine rounds of financing with internal crowdfunding. Here’s how it works: Employees submit their ideas for projects, together with the projected benefits for the company, on a shared platform. All employees can “like” the ideas and share their feedback. Up to a given deadline, creators can continuously refine their projects. Then, a limited number of anonymous investors – all employees are eligible to sign up, and the investors are selected at random – receive a budget, assess the ideas, and are free to allocate funding in 1-euro increments. Those ideas that reach their funding target are green-lighted.

The team of researchers analyzed the data from the idea platform in anonymized form, assessing e.g. how new the ideas were, the investment choices made, and the hierarchical levels involved – factors that were integrated into the study. In addition, they spoke with creators, investors and managers, and conducted an online survey of employee perceptions of the platform’s benefits. The resulting information offered them deeper insights into internal crowdfunding at Siemens. 

 

Publications:

Tim G. Schweisfurth, Claus P. Schöttl, Christina Raasch and Michael A. Zaggl (2023). Distributed decision-making in the shadow of hierarchy: How hierarchical similarity biases idea evaluation. Strategic Management Journal 44(7). DOI:10.1002/smj.3497

https://doi.org/10.1002/smj.3497

Claus P. Schöttl, Christian Homma, Tim G. Schweisfurth and Christina Raasch (2023). Opening the floodgates: How big companies can reap the benefits of internal crowdfunding. Business Horizons, Sept. 21th 2023

 

About KLU

Kühne Logistics University – Wissenschaftliche Hochschule für Logistik und Unternehmensführung (KLU) – is a private university located in Hamburg’s HafenCity. The independent, state-certified university’s major research areas are Sustainability, Digital Transformation, Entrepreneurship and Value Creation in the fields of Transport, Global Logistics, and Supply Chain Management.

KLU is one of very few private universities in Germany entitled to confer their own PhDs.

With one BSc and three MSc degree programs, a structured doctoral program, and a part-time Executive MBA, KLU offers its 400 full-time students a high level of specialization and excellent learning conditions. KLU has an international team of around 30 professors who teach in English. In open, tailor-made management seminar series, industry specialists and managers alike benefit from the application of academic findings to practical issues.

§ Follow us on LinkedIn and Twitter (@THE_KLU).

§ KLU research, events & executive education: KLU Business Newsletter

§ More Information: www.the-klu.org

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JOURNAL

Strategic Management Journal

DOI

10.1016/j.bushor.2023.09.003 

METHOD OF RESEARCH

Case study

SUBJECT OF RESEARCH

People

ARTICLE TITLE

Opening the floodgates: How big companies can reap the benefits of internal crowdfunding

The secret to enhancing consumer valuation and addressing the climate crisis at once: introduce circular take-back programs

News from the Journal of Marketing

Peer-Reviewed Publication

AMERICAN MARKETING ASSOCIATION

Researchers from Boston University published a Journal of Marketing study showing that tapping into consumers’ sense of ownership prompts them to place a higher value on products from a circular economy.

The study, forthcoming in the Journal of Marketing, is titled “Affording Disposal Control: The Effect of Circular Take-Back Programs on Psychological Ownership and Valuation” and is authored by Anna Tari and Remi Trudel. 

Governments worldwide view a circular economy as part of the solution to the climate crisis. In the U.S., several states such as California, Connecticut, Maine, Oregon, and Vermont have implemented Extended Producer Responsibility (EPR) laws that hold manufacturers accountable for the entire life cycle of their products, including disposal and repurposing. However, implementing circular take-back programs under EPR regulations faces challenges as policymakers grapple with prioritizing these programs when faced with limited consumer awareness and support. Manufacturers resist these programs due to potential cost escalation, shrinking profit margins, and the perceived burden of passing costs onto consumers, potentially compromising their competitiveness in the market.

Consumer Interest in Take-Back Programs

The researchers discover that consumers exhibit a higher willingness to pay for products that are part of a circular take-back program. Tari explains that “the driving force behind this willingness lies in a concept known as psychological ownership. Circular products offer control over the disposal of the product, which taps into consumers’ sense of ownership, prompting them to place higher value on these items. This finding could alter how businesses and policymakers approach the implementation of circular programs.”

A circular economy can decrease supply chain risk by increasing the security and price stability of a company’s supply chain through the use of recovered materials. Circular programs may also allow firms to develop new markets, gain new customers, and build their brands and reputations as environmentally friendly and innovative organizations.

Several companies have recognized the benefits of the circular economy. For example, clothing retailer H&M encourages consumers to participate in its circular take-back program by returning their used clothes to the retailer. Depending on the type of clothing and its condition, H&M donates the clothing to charity, recycles it, or reuses it to make new clothing to sell. IKEA has committed to being 100% circular by 2030 and has implemented a take-back scheme promoted extensively in stores. Zara has expanded its “Closing the Loop” initiative to include home collection services.

Eight experiments that study a variety of products demonstrate that people ascribe more valuation to circular program products. The increase in valuation is due to a factor unique to circular program products: disposal control. This control does not in itself increase valuation; rather, it increases the capacity for a circular economy product to evoke psychological ownership. 

Lessons for Marketers and Policymakers

The study offers valuable lessons for chief marketing officers:

• Manufacturers need to reassess their concerns about cost implications. The study illuminates the potential for consumers to accept price adjustments associated with circular programs.
• Companies can make take-back programs product-specific and allow consumers to directly return products they no longer need to the manufacturer or retailer. This gives consumers more control over disposal, as opposed to relying on a broader curbside recycling system.
• Implementation of a take-back program does not seem to require product discounts or the need for companies to offer convenient pick-up services.

It also emphasizes lessons for policymakers:

• Foster awareness and understanding among consumers and boost political will for these programs.
• Focus on policies that can lead to increased investment in regulatory frameworks, infrastructure, and financial incentives to support such programs.
• Promote policies and encourage companies to participate in these programs by providing them with guidelines on how to do so. When companies are informed that consumers value circular program products, they may be more willing to invest in them, creating a potential positive cycle of engagement where consumer demand and corporate engagement reinforce each other.

The insights from this research hold important conclusions. Trudel says that “businesses can align their strategies with consumer values; policymakers can foster support for sustainable initiatives; and consumers can make choices that resonate with their values. It is time to embrace the circular economy not just as a theoretical concept, but as a tangible force for positive transformation in our society.”

Full article and author contact information available at: https://doi.org/10.1177/00222429231196576

About the Journal of Marketing 

The Journal of Marketing develops and disseminates knowledge about real-world marketing questions useful to scholars, educators, managers, policy makers, consumers, and other societal stakeholders around the world. Published by the American Marketing Association since its founding in 1936, JM has played a significant role in shaping the content and boundaries of the marketing discipline. Shrihari (Hari) Sridhar (Joe Foster ’56 Chair in Business Leadership, Professor of Marketing at Mays Business School, Texas A&M University) serves as the current Editor in Chief.
https://www.ama.org/jm

About the American Marketing Association (AMA) 

As the largest chapter-based marketing association in the world, the AMA is trusted by marketing and sales professionals to help them discover what is coming next in the industry. The AMA has a community of local chapters in more than 70 cities and 350 college campuses throughout North America. The AMA is home to award-winning content, PCM® professional certification, premiere academic journals, and industry-leading training events and conferences.
https://www.ama.org

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JOURNAL

Journal of Marketing

DOI

10.1177/00222429231196576 

ARTICLE TITLE

Affording Disposal Control: The Effect of Circular Take-Back Programs on Psychological Ownership and Valuation

How the relationship between the land and atmosphere facilitated the persistence of eastern China’s extreme weather and climate in summer 2022？

Peer-Reviewed Publication

INSTITUTE OF ATMOSPHERIC PHYSICS, CHINESE ACADEMY OF SCIENCES

 

IMAGE: 

LOCAL LAND–ATMOSPHERE COUPLING PLAYED AN IMPORTANT ROLE IN THE PERSISTENCE OF THE COMPOUND EXTREME EVENTS OVER EAST CHINA IN 2022

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CREDIT: YUE CHEN

Extreme weather and climate events, such as droughts, heatwaves, and rainstorms, pose serious threats to human health, agricultural production, and energy supplies. These events often occur at the same time, and such "compound extreme events" can cause far more damage than any one single event. Climate scientists from the research group of Prof. Aihui Wang from the Institute of Atmospheric Physics, Chinese Academy of Sciences, Beijing, China, argue in a new study that land–atmosphere coupling (the coupling of the land surface and the atmosphere through processes such as evaporation, transpiration, and heat exchange) may have played an important role in the persistent compound extreme events witnessed in the summer of 2022 in eastern China. The paper has recently been published in Atmospheric and Oceanic Science Letters.

Eastern China is not only a typical monsoon region, but also a hotspot of land–atmosphere coupling, both of which contribute to the challenge of accurately predicting extreme weather and climate events in this region. In this respect, land surface features are important sources of predictability on various time scales. Moreover, significant asymmetry exists in the feedback between these features and the atmosphere, which often plays a significant role in amplifying extreme weather and climate events.

In the summer of 2022, persistent high temperature and drought compound extreme events occurred in central and eastern China, affecting a wide area and lasting for a long time. Overall, the extreme heat lasted for 79 days, which was the longest since 1961, and the intensity was also the highest on record. Furthermore, the end time of these high-temperature events was later than it would normally be, and the severe summer and autumn drought in southern China had pervasive impacts on agriculture.

In their study, Prof. Wang and colleagues point out that the persistent high temperature, precipitation deficit, and soil drought occurred in eastern China during the warm season of 2023. Among them, the above compound extreme events maintained in the middle and lower reaches of the Yangtze River and southeast China from July to September, significantly deviating from the historical situation in the same period.

"Dry soil can be regarded as an important prior signal of subsequent high-temperature events, and the intraseasonal variation of land–atmosphere feedback can strongly regulate the persistence of such extreme events", explains Prof. Wang.

In humid regimes, such as the middle and lower reaches of the Yangtze River valley and the southeast China, evapotranspiration is mainly limited by the available energy over the land surface. In other words, the soil water content in these areas is abundant, and in general, the more radiation energy absorbed by the land surface, the stronger the evapotranspiration. From mid-summer to early autumn of 2022, the available energy increased to such an extent that the limiting effect of soil water content on evapotranspiration gradually exceeded its long-term average. High temperatures reduced the soil moisture, while the dry land surface further heated the atmosphere in return through strong feedback. Meanwhile, high temperatures accelerated the loss of soil water by regulating evapotranspiration, which inhibited the formation of rain after July.

The findings of this study enhance our understanding of the processes underlying persistent extreme events and potentially offer insights into better predicting them.

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JOURNAL

Atmospheric and Oceanic Science Letters

DOI

10.1016/j.aosl.2023.100419 

ARTICLE TITLE

Role of land–atmosphere coupling in persistent extreme climate events in eastern China in summer 2022