The document discusses how beliefs systems influence investment decisions and strategies in important ways. It provides two examples: 1) How beliefs about economic versus accounting frames of reference led to divergent views on liability-driven investing. 2) How the use of style boxes to classify investment managers can create incentives for managers to conform to consultant definitions of style over pursuing returns. The document argues that unpacking unconscious beliefs and their cultural influences is important for improving investment judgment and evaluating investment managers.
This document summarizes research on leadership qualities needed for innovation. The researchers conducted a quantitative study of 31 leaders and 209 observers from 5 companies over 5 years. They found that leaders successful at innovation demonstrated 5 key behaviors: stewardship, communication, empowerment, creativity, and vision. The alignment between a leader's self-view and how others view them indicates whether the organization will succeed at innovation. The researchers propose an assessment scale called iLeadership to evaluate leaders and units responsible for innovation.
The document discusses strategies for creating a sustainable built environment in the 21st century. It argues that taking a strategic foresight approach using scenarios and systems thinking can help anticipate challenges and plan sustainable solutions. Rather than taking a "mechanistic" view of organizations, a "systematic" view that considers interactions within complex adaptive systems is needed to positively influence the future.
John Girard - Workshop - KM Middle East 2011KMMiddleEast
This document is a leader's guide to knowledge management by John P. Girard. It discusses the problems organizations face with information overload and loss of organizational memory due to downsizing. It examines different types of knowledge including explicit and tacit knowledge. It also covers various knowledge management models and the importance of leadership, culture, technology, processes and measurement in knowledge management.
Leadership for tomorrow: Once more, with feelingHay Group India
Know yourself.’ The ancient Greeks considered this a must have
virtue. And they were right, as recent research shows a direct correlation between high leadership performance and accurate self-awareness – in other words, emotional intelligence.
This article and its associated presentation of the same name outlines the activities of Cranmore Foundation and describes a five-part process through which professionals and the business community can translate the world’s wisdom traditions into practical and contemporary design principles. The foundation seeks to inspire and create sustainable solutions for the business community and society at large.
This document provides a framework for understanding leadership. It discusses four key leadership capabilities: sensemaking, relating, visioning, and inventing. Sensemaking involves making sense of the current situation. Relating focuses on developing relationships and connecting with others. Visioning is about creating a compelling vision of the future. Inventing is developing new ways of working together to achieve the vision. The framework also discusses the idea of a "change signature" - each leader's unique way of using these capabilities to create change. Leadership is seen as both an individual and collective capacity.
This document provides an overview of organizational theory from four theoretical perspectives: premodern, modern, late modern, and postmodern. It summarizes the key aspects of each perspective, including their origins, analytical level, view of organizations, form of rationality, and focus of theory. It also discusses themes in organization studies like the 12 P's framework, perspectives on power and influence, and tensions between theoretical codes in organizations. The document aims to frame organization as a concept and provide lenses for understanding power dynamics and diversity in organizational life.
This document summarizes research on leadership qualities needed for innovation. The researchers conducted a quantitative study of 31 leaders and 209 observers from 5 companies over 5 years. They found that leaders successful at innovation demonstrated 5 key behaviors: stewardship, communication, empowerment, creativity, and vision. The alignment between a leader's self-view and how others view them indicates whether the organization will succeed at innovation. The researchers propose an assessment scale called iLeadership to evaluate leaders and units responsible for innovation.
The document discusses strategies for creating a sustainable built environment in the 21st century. It argues that taking a strategic foresight approach using scenarios and systems thinking can help anticipate challenges and plan sustainable solutions. Rather than taking a "mechanistic" view of organizations, a "systematic" view that considers interactions within complex adaptive systems is needed to positively influence the future.
John Girard - Workshop - KM Middle East 2011KMMiddleEast
This document is a leader's guide to knowledge management by John P. Girard. It discusses the problems organizations face with information overload and loss of organizational memory due to downsizing. It examines different types of knowledge including explicit and tacit knowledge. It also covers various knowledge management models and the importance of leadership, culture, technology, processes and measurement in knowledge management.
Leadership for tomorrow: Once more, with feelingHay Group India
Know yourself.’ The ancient Greeks considered this a must have
virtue. And they were right, as recent research shows a direct correlation between high leadership performance and accurate self-awareness – in other words, emotional intelligence.
This article and its associated presentation of the same name outlines the activities of Cranmore Foundation and describes a five-part process through which professionals and the business community can translate the world’s wisdom traditions into practical and contemporary design principles. The foundation seeks to inspire and create sustainable solutions for the business community and society at large.
This document provides a framework for understanding leadership. It discusses four key leadership capabilities: sensemaking, relating, visioning, and inventing. Sensemaking involves making sense of the current situation. Relating focuses on developing relationships and connecting with others. Visioning is about creating a compelling vision of the future. Inventing is developing new ways of working together to achieve the vision. The framework also discusses the idea of a "change signature" - each leader's unique way of using these capabilities to create change. Leadership is seen as both an individual and collective capacity.
This document provides an overview of organizational theory from four theoretical perspectives: premodern, modern, late modern, and postmodern. It summarizes the key aspects of each perspective, including their origins, analytical level, view of organizations, form of rationality, and focus of theory. It also discusses themes in organization studies like the 12 P's framework, perspectives on power and influence, and tensions between theoretical codes in organizations. The document aims to frame organization as a concept and provide lenses for understanding power dynamics and diversity in organizational life.
1. The document discusses several definitions of values from various researchers, including Kluckhohn, Rokeach, Hofstede, and Camarinha-Matos and Macedo.
2. Values are described as guiding behavior and influencing choices. Rokeach defined values as enduring beliefs that influence conduct and goals.
3. Hofstede saw values as central to organizational culture and observable through rituals, heroes and symbols. He identified several cultural value dimensions.
This document discusses three types of thinking: future thinking, past thinking, and present thinking. Future thinking involves imagining possibilities, past thinking involves recalling experiences to learn from them, and present thinking involves developing strategies for managing the present. While humans can conceive of all three types of thinking, individuals differ in how much they utilize each, which is referred to as their "mindtime thinking style." The document then provides more details about each type of thinking, including how they relate to perception, motivation, behavior, and potential resistances to environments that don't align with that style of thinking.
The document discusses various models and concepts related to organizational change. It describes rational, social, organic, and political models of organizations. It also discusses planned vs unplanned change, and models of change including the rational change process, 3-step model, campaign approach, total quality management, and knowledge management. Finally, it outlines Hall and Hord's levels of use framework that describes teacher implementation of innovations from non-use to integration.
Data consists of raw facts without context, while information adds relevance and purpose to data. Knowledge is a mix of contextual information, experiences, rules, and values that requires reflection and synthesis to apply.
Data is easily captured and transferred but lacks meaning on its own. Information requires human mediation to understand but is more structured. Knowledge is difficult to capture and transfer as it is highly personal and tacit.
This document provides a template for students to fill out with information about various religions to present to the class. The template includes sections for religious data on number of followers, how people become members, religious diffusion including origin and spread, religious beliefs, cultural interactions, relationship to the natural environment, and religious structures and symbols that appear in the cultural landscape. Students will research religions and present information to fill in this matrix.
The document provides an overview of a corporate communication workshop presented by Fluffy Orange PR. It discusses topics such as cross-cultural management, the history of public relations in China and America, different corporate cultures, psychological barriers faced by expatriates, avoiding conflicts between cultures, non-verbal communication, and tips for cross-cultural communication.
The document discusses the importance of developing emotional intelligence skills to achieve excellence. It argues that excellence is a habit that comes from consistently applying knowledge and skills with the right attitude. Developing self-awareness, self-regulation, motivation, empathy and social skills allows one to manage emotions effectively and build strong relationships, which are keys to outstanding performance and success.
The document provides information about cross-cultural management, public relations history in China and America, corporate culture, and challenges with international adjustment. It discusses cultural knowledge, stereotypes, management styles, communication differences, and how to avoid conflicts between differing cultures. Tips are given for non-verbal communication, psychological barriers expatriates may face, and how to improve international adjustment.
The document summarizes a study that examined the relationship between managers' versatility and their diversity and inclusion practices. The study found:
1) Managers with higher versatility scored higher on measures of diversity and inclusion practices than those with lower versatility.
2) There were significant differences in diversity and inclusion scores between managers in the lower and upper halves of versatility.
3) Versatility accounted for 21% of the variance in managers' diversity and inclusion practices and was the strongest predictor compared to other factors measured.
A Study on Emotional Quotient Among new Generation Employeesijtsrd
Success in the workplace takes a lot more than education, book knowledge or experience. Organizations and the conscious, achievement-oriented managers need a high rate of Emotional Quotient to be successful. Emotional Quotient is the ability to identify and manage personal emotions and the emotions of others. Emotional Quotient EQ matters just as much as intellectual ability IQ . In the employment field, work pressure, anxiety, employee's stress, agitation, depression or irritability all are related to the various factors of emotional intelligence. All these emotional intelligence symptoms could harm employee's performance. It can direct either a higher or lower level of morale, which will ultimately impact employee's performance in a positive or negative way. The main question of the study is to analyze the emotional intelligence according to new generations in banking and IT Field. Mr. S. Maheshwaran | Dr. K. Soniya | Dr. S. Krishnaraj "A Study on Emotional Quotient Among new Generation Employees" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-2 | Issue-6 , October 2018, URL: http://www.ijtsrd.com/papers/ijtsrd18900.pdf
The document summarizes several classical and modern sociological theories about the role and purpose of religion in society. It discusses functionalism, which views religion as a conservative force that promotes social stability. It also examines Marxism, which sees religion as legitimizing social inequality and disguising exploitation. The document then analyzes Durkheim's functionalist perspective that religion symbolizes society and reinforces social solidarity through collective rituals and beliefs like totemism.
Este documento define la organización en pequeñas empresas como establecer relaciones efectivas entre personas para trabajar juntas de manera eficiente y lograr objetivos bajo condiciones dadas. Explica que la organización es importante para alcanzar objetivos de manera continua, eficiente y eficaz. También describe los elementos básicos de la estructura organizacional como la jerarquía, especialización y asignación de actividades, así como principios como objetivos comunes, autoridad, coordinación y continuidad. Finalmente, señala que los organigramas representan gráfic
Este documento es un modelo de contrato de mantenimiento informático entre un cliente y un proveedor. El contrato establece que el proveedor se compromete a prestar servicios de mantenimiento de hardware, software y red al cliente, incluyendo mantenimiento preventivo y correctivo. Además, detalla los términos y condiciones generales y específicos de la prestación de los servicios, como la confidencialidad, responsabilidades, horarios y medios que se utilizarán.
El documento presenta un modelo de contrato entre un cliente y un proveedor para la prestación de servicios de auditoría informática. El proveedor se compromete a realizar una auditoría de los sistemas informáticos del cliente para conocer su situación actual y generar un informe detallado con un plan para garantizar un óptimo nivel de los sistemas. El contrato establece los términos y condiciones generales y específicos para la prestación de los servicios, incluyendo obligaciones de confidencialidad, protección de datos y responsabilidad por errores.
El documento resume una investigación sobre las vivencias de los docentes en su labor de enseñanza. La investigación utilizó entrevistas con docentes de educación media para conocer sus experiencias. Algunas de las conclusiones fueron que la vocación docente debe reflejarse en habilidades y preferencias, y que los docentes deben enfocarse en enseñar bien para ver el aprendizaje y evolución de los estudiantes. Factores como la motivación y las emociones afectan el desempeño docente. Una buena relación entre estudiantes y maestros
Este documento describe las dimensiones reglamentarias de una cancha de padel, incluyendo la longitud y anchura de la cancha, la altura y anchura de la red, las dimensiones de las líneas y áreas de servicio, y los requisitos para los cerramientos, suelo e iluminación de la cancha. También especifica los accesos a la cancha y detalles adicionales sobre los materiales permitidos para la construcción de la red, cerramientos y superficie de juego.
Este documento resume los conceptos fundamentales de la terapia racional emotiva de Albert Ellis. Describe la trayectoria profesional de Ellis y cómo desarrolló este enfoque cognitivo-conductual. Explica el modelo A-B-C, donde los acontecimientos (A) no son los que directamente causan las consecuencias (C), sino las creencias (B) que una persona tiene sobre dichos acontecimientos. Estas creencias pueden ser racionales o irracionales, y determinan si se experimentan emociones y conductas saludables o no. Finalmente
El documento describe el Sistema de Señalización Numero 7 (SS7), el cual es el sistema de señalización más utilizado en telecomunicaciones. SS7 funciona como una red independiente que transporta mensajes de señalización para establecer, mantener y desconectar llamadas telefónicas. Posee características como alta flexibilidad, capacidad, confiabilidad y velocidad.
Este documento presenta una introducción a la unidad 6 de administración de archivos. Explica conceptos clave como sistemas de archivos, jerarquía de datos, tipos de archivos, interfaz con el usuario, diseño del sistema de archivos y más. El objetivo es ayudar a los estudiantes de quinto semestre de informática a comprender mejor esta unidad sobre sistemas operativos.
Este documento presenta orientaciones para la elaboración de guías de autoaprendizaje por competencias laborales para instructores del Centro de Servicios Financieros del SENA en Bogotá. Explica los elementos que debe contener una guía como nombre del módulo, presentación, unidad de competencia, actividades de enseñanza-aprendizaje-evaluación, estrategias de aprendizaje y criterios de evaluación. Además, provee un procedimiento paso a paso para que los instructores puedan elaborar sus propias guías de autoaprendizaje orientadas a
Este documento contiene información sobre varios temas de álgebra lineal incluyendo:
1) Define un vector unitario como un vector cuyo módulo es igual a 1.
2) Explica la desigualdad triangular, que establece que la suma de las longitudes de dos lados de un triángulo siempre es mayor que la longitud del lado restante.
3) Describe cómo realizar la suma de vectores tanto matemáticamente como gráficamente usando el método del paralelogramo.
1. The document discusses several definitions of values from various researchers, including Kluckhohn, Rokeach, Hofstede, and Camarinha-Matos and Macedo.
2. Values are described as guiding behavior and influencing choices. Rokeach defined values as enduring beliefs that influence conduct and goals.
3. Hofstede saw values as central to organizational culture and observable through rituals, heroes and symbols. He identified several cultural value dimensions.
This document discusses three types of thinking: future thinking, past thinking, and present thinking. Future thinking involves imagining possibilities, past thinking involves recalling experiences to learn from them, and present thinking involves developing strategies for managing the present. While humans can conceive of all three types of thinking, individuals differ in how much they utilize each, which is referred to as their "mindtime thinking style." The document then provides more details about each type of thinking, including how they relate to perception, motivation, behavior, and potential resistances to environments that don't align with that style of thinking.
The document discusses various models and concepts related to organizational change. It describes rational, social, organic, and political models of organizations. It also discusses planned vs unplanned change, and models of change including the rational change process, 3-step model, campaign approach, total quality management, and knowledge management. Finally, it outlines Hall and Hord's levels of use framework that describes teacher implementation of innovations from non-use to integration.
Data consists of raw facts without context, while information adds relevance and purpose to data. Knowledge is a mix of contextual information, experiences, rules, and values that requires reflection and synthesis to apply.
Data is easily captured and transferred but lacks meaning on its own. Information requires human mediation to understand but is more structured. Knowledge is difficult to capture and transfer as it is highly personal and tacit.
This document provides a template for students to fill out with information about various religions to present to the class. The template includes sections for religious data on number of followers, how people become members, religious diffusion including origin and spread, religious beliefs, cultural interactions, relationship to the natural environment, and religious structures and symbols that appear in the cultural landscape. Students will research religions and present information to fill in this matrix.
The document provides an overview of a corporate communication workshop presented by Fluffy Orange PR. It discusses topics such as cross-cultural management, the history of public relations in China and America, different corporate cultures, psychological barriers faced by expatriates, avoiding conflicts between cultures, non-verbal communication, and tips for cross-cultural communication.
The document discusses the importance of developing emotional intelligence skills to achieve excellence. It argues that excellence is a habit that comes from consistently applying knowledge and skills with the right attitude. Developing self-awareness, self-regulation, motivation, empathy and social skills allows one to manage emotions effectively and build strong relationships, which are keys to outstanding performance and success.
The document provides information about cross-cultural management, public relations history in China and America, corporate culture, and challenges with international adjustment. It discusses cultural knowledge, stereotypes, management styles, communication differences, and how to avoid conflicts between differing cultures. Tips are given for non-verbal communication, psychological barriers expatriates may face, and how to improve international adjustment.
The document summarizes a study that examined the relationship between managers' versatility and their diversity and inclusion practices. The study found:
1) Managers with higher versatility scored higher on measures of diversity and inclusion practices than those with lower versatility.
2) There were significant differences in diversity and inclusion scores between managers in the lower and upper halves of versatility.
3) Versatility accounted for 21% of the variance in managers' diversity and inclusion practices and was the strongest predictor compared to other factors measured.
A Study on Emotional Quotient Among new Generation Employeesijtsrd
Success in the workplace takes a lot more than education, book knowledge or experience. Organizations and the conscious, achievement-oriented managers need a high rate of Emotional Quotient to be successful. Emotional Quotient is the ability to identify and manage personal emotions and the emotions of others. Emotional Quotient EQ matters just as much as intellectual ability IQ . In the employment field, work pressure, anxiety, employee's stress, agitation, depression or irritability all are related to the various factors of emotional intelligence. All these emotional intelligence symptoms could harm employee's performance. It can direct either a higher or lower level of morale, which will ultimately impact employee's performance in a positive or negative way. The main question of the study is to analyze the emotional intelligence according to new generations in banking and IT Field. Mr. S. Maheshwaran | Dr. K. Soniya | Dr. S. Krishnaraj "A Study on Emotional Quotient Among new Generation Employees" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-2 | Issue-6 , October 2018, URL: http://www.ijtsrd.com/papers/ijtsrd18900.pdf
The document summarizes several classical and modern sociological theories about the role and purpose of religion in society. It discusses functionalism, which views religion as a conservative force that promotes social stability. It also examines Marxism, which sees religion as legitimizing social inequality and disguising exploitation. The document then analyzes Durkheim's functionalist perspective that religion symbolizes society and reinforces social solidarity through collective rituals and beliefs like totemism.
Este documento define la organización en pequeñas empresas como establecer relaciones efectivas entre personas para trabajar juntas de manera eficiente y lograr objetivos bajo condiciones dadas. Explica que la organización es importante para alcanzar objetivos de manera continua, eficiente y eficaz. También describe los elementos básicos de la estructura organizacional como la jerarquía, especialización y asignación de actividades, así como principios como objetivos comunes, autoridad, coordinación y continuidad. Finalmente, señala que los organigramas representan gráfic
Este documento es un modelo de contrato de mantenimiento informático entre un cliente y un proveedor. El contrato establece que el proveedor se compromete a prestar servicios de mantenimiento de hardware, software y red al cliente, incluyendo mantenimiento preventivo y correctivo. Además, detalla los términos y condiciones generales y específicos de la prestación de los servicios, como la confidencialidad, responsabilidades, horarios y medios que se utilizarán.
El documento presenta un modelo de contrato entre un cliente y un proveedor para la prestación de servicios de auditoría informática. El proveedor se compromete a realizar una auditoría de los sistemas informáticos del cliente para conocer su situación actual y generar un informe detallado con un plan para garantizar un óptimo nivel de los sistemas. El contrato establece los términos y condiciones generales y específicos para la prestación de los servicios, incluyendo obligaciones de confidencialidad, protección de datos y responsabilidad por errores.
El documento resume una investigación sobre las vivencias de los docentes en su labor de enseñanza. La investigación utilizó entrevistas con docentes de educación media para conocer sus experiencias. Algunas de las conclusiones fueron que la vocación docente debe reflejarse en habilidades y preferencias, y que los docentes deben enfocarse en enseñar bien para ver el aprendizaje y evolución de los estudiantes. Factores como la motivación y las emociones afectan el desempeño docente. Una buena relación entre estudiantes y maestros
Este documento describe las dimensiones reglamentarias de una cancha de padel, incluyendo la longitud y anchura de la cancha, la altura y anchura de la red, las dimensiones de las líneas y áreas de servicio, y los requisitos para los cerramientos, suelo e iluminación de la cancha. También especifica los accesos a la cancha y detalles adicionales sobre los materiales permitidos para la construcción de la red, cerramientos y superficie de juego.
Este documento resume los conceptos fundamentales de la terapia racional emotiva de Albert Ellis. Describe la trayectoria profesional de Ellis y cómo desarrolló este enfoque cognitivo-conductual. Explica el modelo A-B-C, donde los acontecimientos (A) no son los que directamente causan las consecuencias (C), sino las creencias (B) que una persona tiene sobre dichos acontecimientos. Estas creencias pueden ser racionales o irracionales, y determinan si se experimentan emociones y conductas saludables o no. Finalmente
El documento describe el Sistema de Señalización Numero 7 (SS7), el cual es el sistema de señalización más utilizado en telecomunicaciones. SS7 funciona como una red independiente que transporta mensajes de señalización para establecer, mantener y desconectar llamadas telefónicas. Posee características como alta flexibilidad, capacidad, confiabilidad y velocidad.
Este documento presenta una introducción a la unidad 6 de administración de archivos. Explica conceptos clave como sistemas de archivos, jerarquía de datos, tipos de archivos, interfaz con el usuario, diseño del sistema de archivos y más. El objetivo es ayudar a los estudiantes de quinto semestre de informática a comprender mejor esta unidad sobre sistemas operativos.
Este documento presenta orientaciones para la elaboración de guías de autoaprendizaje por competencias laborales para instructores del Centro de Servicios Financieros del SENA en Bogotá. Explica los elementos que debe contener una guía como nombre del módulo, presentación, unidad de competencia, actividades de enseñanza-aprendizaje-evaluación, estrategias de aprendizaje y criterios de evaluación. Además, provee un procedimiento paso a paso para que los instructores puedan elaborar sus propias guías de autoaprendizaje orientadas a
Este documento contiene información sobre varios temas de álgebra lineal incluyendo:
1) Define un vector unitario como un vector cuyo módulo es igual a 1.
2) Explica la desigualdad triangular, que establece que la suma de las longitudes de dos lados de un triángulo siempre es mayor que la longitud del lado restante.
3) Describe cómo realizar la suma de vectores tanto matemáticamente como gráficamente usando el método del paralelogramo.
Este documento proporciona un resumen del informe de 2013 sobre la Inversión Extranjera Directa en América Latina y el Caribe publicado por la Comisión Económica para América Latina y el Caribe (CEPAL). El informe analiza las tendencias de la IED en la región, incluidos los flujos, sectores, países inversores y efectos. Brasil fue el principal receptor de IED en Suramérica, mientras que México lideró en América Central y el Caribe. Las empresas transnacionales se concentraron en sectores como
Este documento describe los conceptos fundamentales de una distribución de frecuencia, incluyendo el número de intervalos, los límites de los intervalos, la amplitud de los intervalos, y varios tipos de distribuciones como la distribución de frecuencia absoluta, relativa, absoluta acumulada y relativa acumulada.
Este documento contiene información sobre varios temas de álgebra lineal incluyendo:
1) La definición de un vector unitario como un vector cuyo módulo es igual a 1.
2) La desigualdad triangular, que establece que la suma de las longitudes de dos lados de un triángulo siempre es mayor que la longitud del lado restante.
3) Que la suma de vectores puede realizarse matemáticamente sumando sus componentes o gráficamente usando el método del paralelogramo.
Este documento describe las enfermedades crónicas como la principal causa de muerte y discapacidad a nivel mundial. Explica que factores como el envejecimiento poblacional, la urbanización y cambios en los estilos de vida han contribuido a la transición epidemiológica hacia enfermedades crónicas. Propone que su prevención y control requiere un enfoque integral que aborde factores sociales, ambientales y de estilo de vida, a través de políticas públicas, vigilancia, promoción de la salud y tratamiento inte
El documento presenta preguntas de auditoría relacionadas con los requisitos de un sistema de gestión en seguridad y salud ocupacional certificado bajo la norma OHSAS 18001. Incluye preguntas sobre la política de seguridad y salud ocupacional de la organización, su planificación para identificar peligros y evaluar riesgos, y sus objetivos y programas para lograr mejoras continuas en este ámbito.
O documento discute a gestão por processos, incluindo mapeamento e modelagem de processos, implementação e documentação de processos, e ferramentas para análise e melhoria de processos. O documento também aborda como criar um ambiente propício para implementação de melhorias.
Este documento proporciona definiciones y conceptos clave relacionados con la salud, enfermedad y bioseguridad en acuicultura. Explica términos como salud, homeostasis, enfermedad, patología, epidemiología, etiología, cuadro clínico y enfermedad infecciosa. También describe los agentes causales de enfermedades, sus características y el proceso patogénico.
Funciones Especiales y Gráficas_Diana CardenasEszme Hdez
Este documento presenta información sobre funciones matemáticas incluyendo funciones inversas, polinomiales y cuadráticas. Explica cómo determinar funciones inversas mediante el cambio de variables y despeje, y define conceptos clave de funciones polinomiales como grado, coeficiente principal y término constante. También analiza ejemplos de funciones lineales y cuadráticas, y aplica estas funciones a situaciones de la vida real como la recolección de algodón y el movimiento de una pelota lanzada hacia arriba.
Este documento presenta ejercicios resueltos sobre interés simple e interés compuesto. Explica las fórmulas para calcular el capital futuro, capital inicial, tasa de interés, y número de períodos para ambos tipos de interés. Luego, resuelve cuatro ejercicios aplicando estas fórmulas a diferentes escenarios de inversión con tasas de interés anual y mensual.
Resetting Values in the aftermath of the banking crisisPaul Sweeney
In the aftermath of successive banking scandals, investigations have rightly identified a failure to “walk the talk” - actions have not been aligned with values.
It may be tempting to believe that a renewed push on resetting and embedding values will change behaviours.
And indeed it is a good start, but all our experience tells us that other factors are at play.
This document provides an overview of corporate culture, change management, and emotionally intelligent leadership. It discusses how culture impacts an organization's ability to manage change. Effective change management can increase productivity while poor change management decreases productivity. Emotionally intelligent leadership is important for navigating change in a way that reduces anxiety and stress for employees. The document uses examples and models to illustrate these concepts and their interrelationships.
This document summarizes research on organizational culture and dark leadership. It defines organizational culture and explores how levels of control within an organization can influence deviant behavior. Dark leadership is defined using Edwin Sutherland's concept of white-collar crime. The relationship between CEO and board is discussed. Research on dark leadership frameworks and factors that can enable corrupt organizational cultures like groupthink are summarized.
This was a project for my communications class in which we had to chose and organization and observe it. Afterwards we much put together our suggestions on how the communication within the company can be improved.
This document discusses creating and diagnosing organizational culture. It begins by defining organizational culture as the shared assumptions and beliefs that influence how an organization functions. Leaders play a key role in shaping culture through what they emphasize, reward, and role model. The document outlines different types of organizational cultures and how culture impacts decision-making and performance. It provides methods for diagnosing an organization's existing culture and introduces strategies leaders can use to establish and reinforce a new culture.
FALL 2016 WORK & Society Discussion assignment SECTION A Part .docxssuser454af01
FALL 2016 WORK & Society Discussion assignment
SECTION A Part 1 of 2
You will discuss your recommendations for a change in organizational culture in one of two organizations: you have been assigned to discuss the Secret Service (SS) READ the
Secret Service article: http://www.nytimes.com/2015/01/15/us/politics/secret-service-reshuffling-follows-scandals.html?_r=0
Directions: Answer questions 1 & 2. Be specific paying particular attention to pp. 116 & 117 in the Schein article (below). Label answers 1&2 with SS on the subject line, as you are assigned.
1) Select a level of culture (either artifacts, espoused values or basic assumptions) and briefly describe how it is currently manifested in the organization. What should this level look like after a culture change?
2) Using either socialization by a dominant subculture or leader intervention, what steps should be used to change the culture? In other words, selecting one of these two methods, what would you recommendation happen to change the culture?
{pp. 116 & 117} of Schein Article (Organizational Culture by Edgar H. Schein
nsions have been made, and some preliminary support for the above hypotheses has been forthcoming (Feldman, 1976, 1988; G. R. Jones, 1986). Insofar as cultural evolution is a function of innovative and creative efforts on the part of new members, this line of investigation is especially important. Cultural Dynamics: Natural Evolution Every group and organization is an open system that exists in multiple environments. Changes in the environment will produce stresses and strains inside the group, forcing new learning and adaptation. At the same time, new members coming into the group will bring in new beliefs and assumptions that will influence currently held as- sumptions. To some degree, then, there is constant pres- sure on any given culture to evolve and grow. But just as individuals do not easily give up the elements of their identity or their defense mechanisms, so groups do not easily give up some of their basic underlying assumptions merely because external events or new members discon- firm them. An illustration of "forced" evolution can be seen in the case of the aerospace company that prided itself on its high level of trust in its employees, which was reflected in flexible working hours, systems of self-monitoring and self-control, and the absence of time clocks. When a number of other companies in the industry were discov- ered to have overcharged their government clients, the government legislated a system of controls for all of its contractors, forcing this company to install time clocks and other control mechanisms that undermined the cli- mate of trust that had been built up over 30 years. It remains to be seen whether the company's basic assump- tion that people can be trusted will gradually change or whether the company will find a way to discount the el- 116 February 1990 • American Psychologist
fects of an artifact that is in fundamental c ...
Cultural alignment is critical for mergers and acquisitions to succeed but is often ignored. Misalignment of cultures can cause up to 85% of M&A failures. A research-based process identifies cultural differences between parties through surveys, interviews, observations. Gaps in leadership, employee focus, working relationships and other factors are prioritized. Actions target the largest misalignments through symbolic changes to signal a new combined culture.
They say Culture eats Strategy for breakfast. This is true because the biggest leadership challenge to improving an organisation's internal environment is culture. Without a supportive culture even the most brilliant strategy will not get implemented successfully. Without cultural allignment to changing landscape, at best you will get compliance and with it stress, dysfunctional waste and entropy.
Human Resources Business Partner Strategy MasterclassDr Rica Viljoen
This document discusses taking human resources (HR) to a strategic business partnering role through an approach of organizational transformation through inclusivity. It advocates using inclusivity as a radical transformational strategy to create hope, unleash behavioral engagement, and allow HR to reclaim its rightful strategic place. Key points discussed include the importance of transformational leadership, developing emotional intelligence, balancing inclusion and exclusion, and integrating people strategies into overall organizational strategy through understanding organizational culture and releasing different voices.
1) Organizational culture refers to the shared assumptions, values, and beliefs that influence behavior within an organization. It is an important but often invisible aspect of an organization.
2) There are three levels of organizational culture - surface level artifacts, deeper values, and unconscious basic assumptions. Understanding an organization's culture involves analyzing all three levels.
3) A commonly used framework identifies seven dimensions that characterize organizational culture, including innovative, aggressive, outcome-oriented, and stable cultures. Understanding these dimensions can help analyze and manage an organization's culture.
1. The document discusses implementing the PEARL culture concept in Asia, outlining potential issues and solutions.
2. Some key issues discussed include major differences between Eastern and Western cultures that could impact PEARL's implementation in Asia, such as higher power distance and collectivism in Asian countries.
3. Potential solutions discussed include adapting the leadership development and culture transformation programs to better fit the Asian context through techniques like blended coaching approaches and action learning workshops.
The organizational culture perspective (steven ott)Sandhya Johnson
Organizational culture is difficult to see but profoundly shapes how an organization functions. It is comprised of artifacts like symbols, behaviors, beliefs, assumptions, and values. These elements can be understood through models that classify them at surface, deeper, and core levels. Culture provides meaning and norms that guide employee actions and priorities. It is shaped by societal influences, the founder's impact, and industry demands. Cultures tend to perpetuate through hiring, socializing, and rewarding employees who uphold shared behaviors and removing those who deviate.
A comperative study of organizational culture of sbi, icici, hdfc bankshweta mukherjee
This document is a mentoring report on the organizational culture of State Bank of India (SBI), ICICI Bank, and HDFC Bank. It includes an introduction to organizational culture, objectives of the study which are to study the current culture of the three banks and compare them to determine the best culture. The report will analyze data collected on the banks' cultures to draw inferences. It aims to generate information on the current work cultures and employees' perspectives within the banks.
The document discusses culture change and transformation within an organization. It defines culture as shared beliefs, values and assumptions of a group. It identifies three levels of culture - artifacts, espoused values, and underlying assumptions. True culture transformation requires changes to the group's basic assumptions. The process involves unfreezing old assumptions, learning new concepts, and refreezing with internalized new assumptions. Elements of a successful culture transformation include defining goals, identifying restraining current cultural aspects, determining an ideal future state, creating a change plan, and engaging people through cultural change teams in an ongoing looped process.
The document discusses key concepts related to resilience, social innovation, and adaptive change. It defines resilience as a system's ability to absorb disturbance and reorganize while retaining function. Adaptability and transformability allow systems to manage or create new ways of living. The adaptive cycle model shows phases of growth, conservation, release/destruction, and reorganization. Strategic grantmaking can aim to build resilience through adaptation or reduce resilience to enable transformation, depending on the goal. Cross-scale interactions are important to consider.
This document discusses the key elements of creating a winning organizational culture. It makes three main points:
1. Cultures do not change directly, but instead learn and adapt over time. To transform a culture, one must build on the existing culture while also looking outside the organization for new perspectives.
2. To assess the current culture, multiple methods should be used, including interviews, observations, and surveys, to get a comprehensive view. Validated models can then help map the current culture and what is possible.
3. The mindset of a winning culture includes traits like playfulness, high aspirations, and passionate energy. However, the core is having a strong organizational identity and soul that deeply connects members,
This document summarizes a study examining 125 equity mutual funds that closed to new investment between 1993 and 2004. The study tests three hypotheses about why funds close: 1) The "good steward" hypothesis argues funds close to restrict inflows and maintain performance, and will perform well after reopening. 2) The "cheap talk" hypothesis posits closing has no real cost if fees increase and existing investors contribute, compensating managers. 3) The "family spillover" hypothesis claims closing diverts attention to other funds in the same family. The study finds little support for good steward performance, but evidence managers raise fees consistent with cheap talk, and little family benefit except briefly around closure.
Standard & poor's 16768282 fund-factors-2009 jan1bfmresearch
This document summarizes a study by Standard & Poor's on factors that predict investment fund performance. The study analyzed both qualitative factors like fund size, expenses, and age as well as quantitative metrics like Jensen's alpha and information ratio. The key findings were:
- For developed markets, larger funds with lower expenses tended to outperform. But for emerging markets, smaller funds did better due to differences in liquidity.
- Jensen's alpha and information ratio best predicted future performance of developed market equity funds over shorter time periods.
- Past performance was informative over 2 years but less so over 1 year due to noise. Fund selection should focus on factors predicting shorter term outperformance.
Performance emergingfixedincomemanagers joi_is age just a numberbfmresearch
1) Younger fixed-income managers tend to outperform older, more established managers in terms of gross returns. Returns are significantly higher for emerging managers in their first year and first five years compared to later years.
2) The study examines 54 fixed-income managers formed since 1985 that had majority employee ownership. Most were formed before 2000, when barriers to entry increased.
3) Business risk is low for emerging managers, as only 6.8% of the 88 examined managers are no longer in business. Higher first-year and early-period returns for emerging managers indicate they provide alpha during their hungry startup phase.
This document analyzes different categories of active mutual fund management based on measures of Active Share and tracking error. It finds that the most active stock pickers have outperformed their benchmarks after fees, while closet indexers and funds focusing on factor bets have underperformed after fees. Performance patterns were similar during the 2008-2009 financial crisis. Closet indexing has become more popular recently. Fund performance can be predicted by cross-sectional stock return dispersion, favoring active stock pickers when dispersion is higher.
The document summarizes findings from the Standard & Poor's Indices Versus Active Funds (SPIVA) Scorecard, which compares the performance of actively managed mutual funds to relevant benchmarks. Some key points:
- Over the past 3 years, the majority (over 50%) of actively managed large-cap, mid-cap, small-cap, global, international, and emerging market funds underperformed their benchmarks.
- Over the past 5 years, indices outperformed a majority of active managers in nearly all major domestic and international equity categories based on equal-weighted returns. Asset-weighted averages also showed underperformance in 11 out of 18 domestic categories.
- For fixed income funds, over 50% under
This document summarizes research on the relationship between portfolio turnover and investment performance. Recent studies have found no evidence that higher portfolio turnover leads to lower returns, as was previously thought. Trading costs have declined over time, and portfolio turnover is not a good proxy for actual trading costs, which depend more on trade size and type of security traded. A 2007 study directly estimated trading costs and found no clear correlation between costs and returns. The author's own analysis of mutual funds from 2007-2008 also found little relationship between turnover and performance. Therefore, advisors should not assume higher turnover means lower returns.
This document discusses using active share and tracking error as measures of portfolio manager skill. It defines active share as the percentage of a fund's portfolio that differs from its benchmark index. Tracking error measures systematic factor risk by capturing how much a fund's returns vary from its benchmark. Research shows funds with high active share and moderate tracking error tend to outperform on average. The document examines how active share and tracking error can help identify skillful managers by focusing on their portfolio construction process rather than just past returns.
This document is a guide to the markets published by JPMorgan that provides data and analysis across various asset classes including equities, fixed income, international markets, and the economy. It includes sections on returns by investment style and sector for equities, economic indicators and drivers, interest rates and other data for fixed income, international market returns and valuations, and asset class performance and correlations. The guide contains over 60 charts and analyses global and domestic financial trends and investment opportunities.
The document discusses whether the concept of "Alpha" is a useful performance metric for investors. It makes two main arguments:
1) Alpha alone does not determine if a portfolio has superior risk-adjusted returns, as portfolio volatility and correlation to benchmarks also influence risk-adjusted returns.
2) Alpha is dependent on leverage - a higher reported Alpha could simply be due to using leverage rather than superior investment skill.
The document concludes that Alpha is a misleading performance measure and not suitable as the sole metric, especially for investors concerned with total risk and returns rather than just a single return component.
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This study examined the performance of emerging investment managers over three years ending in 2006. It found that:
1) For large cap managers, increased firm assets were negatively correlated with risk-adjusted returns for core and growth strategies, but not for value. This may be because increased assets led to less concentrated core portfolios, lowering returns.
2) For small cap managers, risk-adjusted returns were highest for firms with less than $500 million in assets, possibly due to added resources like analysts. Returns leveled off between $500 million and $1 billion, and declined above $1 billion.
3) Having more research analysts was consistently positively correlated with higher risk-adjusted returns across strategies, while the impact
The document discusses Barclays' process for evaluating and selecting investment managers. It states that identifying the right asset allocation and implementing it properly are both important for achieving investment goals. The process involves both science, through a formal and structured methodology, and art, by applying judgment and philosophy. Barclays aims to identify managers most likely to perform well through rigorous due diligence and ongoing monitoring. The paper will explain Barclays' comprehensive approach to manager analysis, selection, and review.
Active managementmostlyefficientmarkets fajbfmresearch
This survey of literature on active vs passive management shows:
1) On average, actively managed funds do not outperform the market after accounting for fees and expenses, though a minority do add value.
2) Studies suggest some investors may be able to identify superior active managers in advance using public information.
3) Investors who identify superior active managers could improve their risk-adjusted returns by including some exposure to active strategies.
This document summarizes recent academic research on active equity managers who deliver persistent outperformance. It discusses studies finding that:
1) While the average equity manager underperforms after fees, a minority of managers have demonstrated persistent outperformance that cannot be attributed to chance alone.
2) Managers with higher "active share" (the degree to which their portfolio composition differs from the benchmark) tend to generate greater risk-adjusted returns.
3) Managers with lower portfolio turnover and a focus on strong stock selection, rather than market timing, are more likely to outperform over time.
The document evaluates how Brown Advisory's investment approach aligns with the characteristics identified in these studies as being associated with persistent
The document discusses China's transition to a consumer-driven economy. It provides analysis from CLSA China Macro Strategist Andy Rothman on trends in China's economy including the declining importance of exports, strong growth in domestic consumption, increasing incomes driving spending, and continued growth in infrastructure investment. The analysis suggests China's economy remains healthy and growing despite slowing external demand.
This report provides an analysis of defined contribution retirement plans based on 2010 Vanguard recordkeeping data. Some key findings include:
- Median and average account balances reached their highest levels since tracking began in 1999, recovering from market declines.
- Use of target-date funds as investment options and default investments continues to grow significantly, with 42% of participants using them and 20% wholly invested in a single target-date fund.
- Professionally managed investment options like target-date funds are being used by an increasing number of participants, with 29% solely invested in an automatic investment program in 2010 compared to just 9% in 2005.
The document discusses the benefits of exercise for mental health. Regular physical activity can help reduce anxiety and depression and improve mood and cognitive function. Exercise causes chemical changes in the brain that may help protect against mental illness and improve symptoms.
This study explores performance persistence in mutual funds. The authors find:
1) Funds that perform relatively poorly compared to peers and benchmarks are more likely to disappear, indicating survivorship bias can be relevant in mutual fund studies.
2) Mutual fund performance persists from year to year on a risk-adjusted basis, though much of the persistence is due to repeated underperformance relative to benchmarks.
3) Persistence patterns vary dramatically between time periods, suggesting performance is correlated across managers due to common strategies not captured by risk adjustments. Poorly performing funds also persist instead of being fully eliminated by the market.
This study examines persistence in mutual fund performance over 1962-1993 using a survivorship-bias-free database. The author finds:
1) Common factors in stock returns and differences in mutual fund expenses explain almost all persistence in mutual fund returns, with the exception of strong underperformance by the worst-performing funds.
2) The "hot hands effect" documented in prior literature is driven by the one-year momentum effect in stock returns, but individual funds do not earn higher returns from actively following momentum strategies after accounting for costs.
3) Expenses have a negative impact on performance of at least one-for-one, and higher turnover also negatively impacts performance, reducing returns by around 0.95
This paper examines the relationship between mutual fund manager ownership stakes in the funds they manage and the performance of those funds. The author hypothesizes that greater manager ownership will be positively associated with fund returns and negatively associated with fund turnover, as higher ownership would better align manager and shareholder interests by reducing agency costs. Using a dataset of manager ownership disclosures from 2004-2005, the author finds that funds with higher manager ownership had higher returns and lower turnover, supporting the hypotheses. However, manager ownership was not related to a fund's tax burden.
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"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
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Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
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For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
Abhay Bhutada, the Managing Director of Poonawalla Fincorp Limited, is an accomplished leader with over 15 years of experience in commercial and retail lending. A Qualified Chartered Accountant, he has been pivotal in leveraging technology to enhance financial services. Starting his career at Bank of India, he later founded TAB Capital Limited and co-founded Poonawalla Finance Private Limited, emphasizing digital lending. Under his leadership, Poonawalla Fincorp achieved a 'AAA' credit rating, integrating acquisitions and emphasizing corporate governance. Actively involved in industry forums and CSR initiatives, Abhay has been recognized with awards like "Young Entrepreneur of India 2017" and "40 under 40 Most Influential Leader for 2020-21." Personally, he values mindfulness, enjoys gardening, yoga, and sees every day as an opportunity for growth and improvement.
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OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
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How Non-Banking Financial Companies Empower Startups With Venture Debt Financing
Investment beliefsystems nepc
1. INVESTMENT BELIEF SYSTEMS1
A CULTURAL PERSPECTIVE
John R. Minahan, CFA2
Senior Investment Strategist
Introduction Show how a cultural perspective on be-
liefs can illuminate investment behavior
Investment management is a judgment-rich en- that otherwise seems puzzling.
deavor. The major components of managing an
investment program – determining objectives, Offer some suggestions on how to make
finding and exploiting opportunities, and evaluat- beliefs more conscious and deliberate.
ing the extent to which objectives have been
achieved – all involve judgment as much as data. Argue that a key part of evaluating an in-
Judgments in turn are framed by one's system of vestment manager is assessing the man-
beliefs about how the investment world works. ager’s belief system.
Given this, it seems worthwhile to ponder where
our beliefs come from, to assess their validity, and
to attempt to improve them as opportunities exist
to do so. BELIEFS ARE COGNITIVE PHENOM-
Not all beliefs are conscious. Some beliefs are
ENA. HOWEVER, THEY ALSO HAVE
taken for granted and have receded into the back A CULTURAL ASPECT.
of our minds until something draws our attention
to them. Unconscious beliefs can have a signifi- Section I begins with some basic concepts and
cant impact on our decisions because they are definitions. Section II illustrates the centrality of
unexamined. While I doubt we can ever become beliefs and culture using two examples drawn
fully conscious of our beliefs, there are things we from my consulting experience: liability-driven
can do to become more conscious of them and to investing and equity style analysis. Section III ad-
refine them over time. My goal in writing this dresses the management of belief systems, in-
chapter is to draw attention to the importance of cluding how beliefs can be made more conscious
beliefs in investment management and to suggest and deliberate. Section IV addresses the role of
that active management of one's belief system beliefs systems in evaluating active investment
can make one a better investor. Specifically, I will managers. Section V summarizes the chapter.
Illustrate by example that beliefs can be a Beliefs, Belief Systems, and Culture
determining factor in investment deci-
sions and strategy. A belief is a hypothesis one holds to be true. A
belief system is an accumulated set of beliefs and
Discuss the unconscious aspect of beliefs, the process by which this set changes in response
especially the role of culture in determin- to new information and ideas. Beliefs and belief
ing unconscious beliefs.
1
This paper was prepared for inclusion in Investment Management: The Noble Challenges of Global Stewardship, Ralph Rieves and Wayne Wagner, editors.
2
I thank Michael Antony, Barclay Douglas, Michael Mauboussin, Larry Pohlman, Rodney Sullivan, Satish Thosar, Barton Waring, Jarrod Wilcox, and seminar par-
ticipants at Boston QWAFAFEW, NEPC, Northfield Information Services Summer Seminar, and UMass-Boston for helpful comments and discussion. All opinions
expressed are mine.
August 2008
2. systems are cognitive phenomena, and as such, by which our beliefs change in response to new
reside within the minds of individuals. However, experiences.
because beliefs tend to cluster within groups –
such as organizations, occupations, or societies – Culture is a particularly important determinant of
they can also be understood as cultural phenom- beliefs. Culture can be understood as a shared
ena. 3 4 5 set of not fully conscious assumptions that shape
the behavior, attitudes, and beliefs of a group of
Beliefs differ from each other in the extent to people, including beliefs about what to pay atten-
which they are supported by evidence. Some be- tion to, what is “real”, and what “works”. Culture
liefs are in obvious conflict with evidence (e.g. is a property of any group that has had a suffi-
housing prices only go up), and others are solidly cient history, including organizations, occupations,
supported by evidence (e.g. bubbles eventually societies, ethnic groups, and sub-units of these
pop). In the middle is a vast array of potential groups.
A particular culture emerges in a group because it
A KEY CHALLENGE OF LEADER- serves a function for that group. Once estab-
SHIP IS TO FIND A BALANCE BE- lished, culture tends to recede into the back-
ground – assumptions which are shared are not
TWEEN CULTURAL PRESERVATION challenged – and becomes change-resistant. The
AND CHANGE. stability of culture can be an asset if the environ-
ment is stable, but may become dysfunctional if
the environment is rapidly changing. In such an
beliefs which have varying degrees of plausibility environment, a key challenge of leadership is to
(e.g. the expected equity risk premium is 3%, stan- find the right balance between preservation and
dard deviation is a good measure of risk, active adaptation. In an investment context the chal-
management is more likely to succeed in ineffi- lenge is to find the right balance between long-
cient asset classes, etc.) Investment management standing, taken-for-granted practices and new
primarily operates within this "broad middle", approaches based on insights into the rapidly
where facts do not unambiguously lead to one changing environment. This is the Noble Chal-
conclusion or another, where one must make lenge, and belief systems are front and center.
judgments which are framed by a belief system.
Investment Belief Systems in Action
Beliefs also differ in the process by which they
are acquired. Our experiences growing up, our This section illustrates the power of culture and
professional training and organizational affilia- belief systems in investment management using
tions, our mentors and role models, and our suc- two examples from my consulting experience,
cesses and failures all influence our beliefs. In- liability-driven investing (LDI) and equity style
deed, the whole sum of our accumulated experi- analysis.6
ence contributes to our beliefs and the process
3
The concepts of beliefs and belief systems used in the chapter are strongly influenced by Dennett (2006) and James (1896).
4
The treatment of culture is adapted from Schein (2004). Schein's concept of culture is similar to that of Ware (2004). For both Schein and Ware the less visible
aspects of culture (shared assumptions, beliefs, and values) determine the more visible aspects (behavior and artifacts), making it hard to change visible culture
without surfacing the less visible elements. Schein is especially focused on shared unconscious assumptions as the most fundamental aspect of culture, but both
agree that surfacing the less visible is necessary to manage the visible.
5
Several times I have been asked how this chapter relates to the behavioral finance literature. I don’t have a very complete answer at this point, but I do think that
the cognitive concepts I use resemble those of Kahneman (2003), and could probably be reframed to more closely resemble Kahneman. I am not aware, however,
of any strand of the behavioral finance literature that uses the cultural framework of Schein as I do. Nor am I aware of any strand of behavioral finance which is
guided by the clinical methodological perspective as this paper is (see next footnote.) Ware, et al (2004, 2006) probably comes closest on both the cultural per-
spective and the clinical methodology. His work is not, to my knowledge, considered part of the mainstream behavioral finance literature, though perhaps it should
be. I think the behavioral finance enterprise has much to gain by incorporating the cultural and clinical perspectives into its tool kit, and I hope this paper and
Ware’s work spark some interest in doing that.
6
For the methodologically minded: the development of these examples was strongly influenced by the clinical perspective in fieldwork articulated by Schein
(1987). The clinical perspective is defined in counterpoint to the ethnographic perspective. An ethnographer enters a human system as a “participant-observer”
and tries very hard to not change the system being studied – the idea being that if you change it you are no longer getting clean data on the system. A clinician, on
the other hand, enters a human system specifically in order to help members of the system solve problems. Schein argues that clinicians are often in a better
position to gather cultural data than are ethnographers – the idea being that you can never really understand how a human system works until you try to change it.
Schein also points out that many real-world work situations provide opportunities to act as a clinician even when one’s role is not explicitly so defined. In my
fifteen years experience in the pension consulting industry, I have often found this to be true.
2 Investment Belief Systems
3. Economic and Accounting Views of Liability- ample of how clueless some money managers and
Driven Investing consultants are about the objectives and prob-
lems of public or Taft-Hartley fund management.
When I talk about LDI7 with my fellow economists,
we take it as given that the accounting rules8 for Whether or not to hedge liabilities is one of the
valuing pension liabilities are largely irrelevant to most significant decisions an investor makes. Yet
assessing the merits of LDI. We have all been here we have two diametrically opposed views,
trained to have a keen eye for the potential of not because of any dispute about facts, but seem-
"accounting illusion" – situations where accounting ingly because of beliefs about the relative impor-
fails to adequately reflect the economics one is tance of economic and accounting frames of ref-
analyzing. In such situations our professional con- erence, beliefs which the holders may not even
ditioning calls for decisions to be based on the be aware of.
best assessment one can make of the economics,
Here’s what we can learn from this:
THE POTENTIAL BENEFIT OF LDI Beliefs matter. The outcome of major in-
vestment decisions can hinge on beliefs as
DOES NOT HINGE ON THE much as on facts.
ACCOUNTING TREATMENT OF Beliefs are not always conscious. The beliefs
LIABILITIES. which determine decisions may be so in-
grained that the holder of the beliefs isn't
aware that he or she is acting on a belief.
and not on distortions introduced by poor meas-
ures of those economics. An implication of this Beliefs tend to cluster in groups (such as
perspective is that the attractiveness of LDI does occupations) where they are reinforced by
not hinge on its accounting treatment. the social validation of others in the group
holding the same beliefs.
Accounting may make the benefit of LDI more or
less transparent, but the benefits are still there The behavior and points of view of people in
even when the accounting treatment masks that a different group with different beliefs can
benefit. The fact that some plan sponsor types be quite puzzling.
(public and Taft-Hartley in the US) do not mark
The LDI example is fairly straightforward. In some
liabilities to market has little to no bearing on the
situations the role culture plays in determining
potential benefits of LDI for those plans, in an
beliefs is more nuanced, and can involve not just
economist's view.
different cultures, but multiple subcultures in a
A different perspective emerges if one talks to single organization, multiple cultural identities in a
people responsible for administering public or single individual (e.g. an individual can be a mem-
Taft-Hartley funds. Numerous times I have heard ber of a profession, an organization, and a society,
such plan sponsors express frustration with all of which have different cultures), and a chang-
money managers and consultants (presumably ing mix of these things over time. The following
trained as economists) who want to talk to them example attempts to capture some of these com-
about LDI. “Don’t they know we are a public plexities.
fund?” they scoff, or “Don’t they know public
funds don’t mark liabilities to market?” The con-
text of these questions is typically one where the
plan sponsor is citing the LDI overture as an ex-
7
The phrase liability-driven investing means different things to different people. I use it to mean investing which treats a liability-mimicking asset portfolio as the
risk-free benchmark against which all risk exposures are measured. LDI does not necessarily involve selecting the liability-mimicking portfolio, but it can. The
commonly held view that LDI means holding a long duration bond portfolio identifies the term with a particular way of implementing LDI rather than with the
approach broadly defined.
8
I use the term "accounting rules" broadly to include valuation rules for funding purposes.
3 Investment Belief Systems
4. A Cultural Interpretation of the Relationship be- ior consultant with whom I worked on this ac-
tween Investment Managers and Consultants: count, he dismissed my interpretation. He
The Case of Style Boxes claimed the style analyzer was "objective"
whereas the manager's explanation was "spin". He
Many times I have evaluated value managers told me that when I get a little more experience I
whose strategy might be summarized as follows: will learn to be more skeptical of charming manag-
purchase stocks of companies which are funda- ers who will “say whatever it takes” to win or keep
mentally troubled, but where the manager be- the business.
lieves a catalyst is present which will turn the
situation around and that catalyst is not yet I have seen variants of this scenario play out many
priced into the stock. Then hold such stocks until times, from both sides of the consultant-manager
either the thesis has played itself out, or it be- divide. The situation looks somewhat different
comes apparent that the thesis is unlikely to play from the manager's perspective. Not only are
out. these situations very frustrating, but ironically,
they can lead managers to make difficult deci-
sions between staying true to their investment
STYLE BOXES CAN CREATE style or changing their style to conform to a con-
PERVERSE INCENTIVES FOR sultant's notion of style discipline. I know of sev-
eral cases where managers' product development
MANAGERS. efforts reverse-engineered consultants’ evalua-
tion criteria, and effectively said "Who are we to
question what the market wants? If the market
I was new to the industry the first time I encoun- wants style boxes instead of superior returns, we
tered such a manager. The manager came to my can do that."
attention because she showed up in a holdings-
based style analysis having migrated from value to Some comments on and lessons from this exam-
growth, and this set off alarms regarding “style ple are:
discipline”. The manager had very good perform-
ance, and this happened during a period of time Consultants and managers can have very dif-
when growth was outperforming value, so on the ferent beliefs about what is important, about
surface it looked like the manager had broken her what information is valid, and about what
value discipline because growth was where the kinds of information define a manager's style.
returns were. Consultants are concerned with classification
of managers so that performance can be as-
A closer examination of the portfolio revealed sessed relative to a benchmark or peer group
that the manager had very little turnover during and multi-manager portfolios can be con-
this period, and that the stocks which were now structed to ensure a certain spectrum of mar-
plotting as growth had plotted as value when the ket coverage. "Style consistency" for the con-
manager bought them. All that had really hap- sultant means having stable measures for
pened was that the manager was correct with those financial ratios that define style boxes.
many of these stocks: earnings were up and price Managers are primarily concerned with ex-
even more, and the stocks starting plotting as ploiting their skill to find undervalued securi-
growth stocks. She was able to explain the origi- ties, and the intersection of skill and opportu-
nal investment thesis for any stock I asked about, nity does not necessarily produce stable fi-
and for those she still held, justify that the thesis nancial ratios through time. To many manag-
was still intact. This led me to suspect that the ers it is puzzling why that should be impor-
style-box program I was using just wasn’t subtle tant.
enough to accurately capture the manager’s style,
and that the style was in fact consistent through A key mechanism by which culturally-based
this period. belief systems sustain themselves is the so-
cialization and sorting of new members of
When I discussed my concerns with the more sen- the cultural group. An important part of this
4 Investment Belief Systems
5. can be the "stripping down" of new members has to wonder if the prevalence of rigidly-
who, often inadvertently, violate the norms of defined style boxes is due to their giving con-
the culture. Such new members will usually sultants a sense of purpose, a "substitute
either adapt to the norms or exit the group, problem" if you will, which diverts attention
so that surviving members of the group share from the fact that the real problem – finding
the norms, and validate them for each other. talented investment managers and building
This sorting and subsequent social validation sensible portfolios of them – is in some cases
is a key reason why cultures resist change. beyond the consultant's reach.10
Social validation of a culture's beliefs does The balance of cultures in a money manage-
not necessarily mean that such beliefs con- ment firm can be influenced by consultants
tribute to the economic competitiveness of and clients. It has often been noted that
the culture. In the case of style boxes, a key some investment management firms have an
investing culture and others have an asset-
gathering culture. I think this is an accurate
CLIENTS AND CONSULTANTS CAN
observation, but I would add that some in-
INFLUENCE THE CULTURE OF AN vestment firms have both an investing subcul-
INVESTMENT MANAGEMENT FIRM. ture and an asset-gathering subculture exist-
ing in tension with each other. While one will
likely dominate at any point in time given the
dysfunction derives from the fact that they direction from the top, as a firm's environ-
encourage uneconomic buying and selling of ment changes, there may be opportunities for
securities. For example, our value manager the latent subculture to assert itself. Consult-
may feel pressed to sell a stock before the ants and clients, as key elements of a man-
thesis has fully played out to insure that she ager’s environment, are in position to influ-
still plots in her style box. This creates an in- ence the balance between subcultures. I be-
centive for managers not constrained by style lieve that a rigid adherence to the style box
boxes (e.g. hedge funds) to pick up the money framework on the part of consultants tips the
left on the table by style-box managers. Al- balance of money manager cultures towards
though there are presumably many reasons asset-gathering.
for the rise of hedge funds in recent years,
one reason may be the opportunity for flexi- Managing Belief Systems
ble, skill-based investing left unexploited by As time proceeds, beliefs are continuously put to
managers constrained by style boxes. The the test. We are constantly immersed in new
poor performance of tightly constrained port- data and ideas. And, if we are fortunate, we en-
folios also puts pressure on the business counter people who challenge our views. These
model of consultants advocating such ap- situations present us with opportunities to re-
proaches. Interestingly, many consultants evaluate and perhaps refine our beliefs. Different
formerly constrained by the style box frame- belief systems respond in different ways to these
work have now embraced "alternatives" due opportunities, and we can classify them accord-
to their superior risk/return characteristics.9 ingly11:
Holdings-based style analysis is extremely A fixed belief system is one that does not
useful, but the rigid use of it can be a crutch. consider new ideas and data, either because
I probably would never have come to under- it is blind to them or because it responds de-
stand the value manager described above as fensively to them.
well as I did if holdings-based analysis didn't
raise some questions for me. However, one An adaptive belief system is one that is aware
9
Unconstrained investing has its own challenges, not the least of which is the risk that managers and consultants will operate outside their skill set. Another chal-
lenge is determining the appropriate benchmarks for evaluating performance.
10
A possible middle-ground between rigid style boxes and unconstrained investing is discussed by Surz (2008).
11
This classification is influenced by Senge (1990) and Argyris and Schon (1978).
5 Investment Belief Systems
6. of new ideas and data and is open to learning ity distinct from accounting measurements?
from them. Do you believe style boxes are a useful way of
organizing an investment program? Do you
A proactive belief system is one that explic- believing in active management? If so, under
itly seeks out new ideas and data with the what circumstances?
purpose of improving beliefs over time.
Become introspective when you are sur-
Because investment management is judgment-rich prised. Our expectations are generated by
and rapidly changing, there would seem to be lit- our belief systems. Every time we are sur-
tle place for fixed belief systems among invest- prised by the outcome of an investment, or by
ment professionals. Not that stable core beliefs what happens in the markets even if it didn’t
aren't an asset – they most certainly are – but effect our investments, it means our belief
even core beliefs should be open to examination system missed something, and this provides
us with an opportunity to reflect on and per-
haps refine our beliefs.
EXPOSURE TO DIFFERENT CUL-
TURES CAN DRAW ATTENTION TO Expose yourself to different cultures. Be-
cause people in the same culture have similar
UNCONSCIOUS BELIEFS. unconscious beliefs, they are less likely to
challenge each other’s most fundamental be-
and should sometimes be refined. Also, the proc- liefs than are people of a different culture,
ess of building stable core beliefs may benefit especially if the different culture has its own
from periods of experimentation. well-developed views on a topic you care
about. For example, as a financial economist I
Below I discuss three aspects investment belief find my beliefs about liability valuation are
system management: self-awareness of one's be- challenged and refined by my discussions with
liefs, the relationship between investment theory actuaries, even though I continue to disagree
and investment beliefs, and the role of evidence with them on some points.
in managing beliefs.
Cross referencing one's beliefs with investment
Enhancing self-awareness of one's beliefs. theory is another useful device for enhancing self-
awareness. This is a big enough topic to warrant
Because our beliefs are in part unconscious, man- its own subheading.
agement of them first involves becoming more
aware of them. Three ways of doing this are: Using investment theory to refine your belief
system.
Attempt to write your beliefs down.12 Am-
bachtscheer (2007) encourages investment Investment theory is part of the professional tool
professionals to write an "Investment Belief kit. Not that one should automatically “believe”
Statement" and to have as a centerpiece of theory, but a professional should be aware of
the statement one's views on the determina- what it can and cannot do, and use it effectively in
tion of expected returns; for example, do you those situations where it is applicable.
believe the equity risk premium changes over
time and are these changes predictable? I It is useful to distinguish two types of theory.
would add that any belief that shapes your Some theory is what one might call "bedrock the-
decisions should be included. For example, ory" – theory that it would take an earthquake to
do you believe there exists an economic real- move. Most bedrock theory is not open to inter-
12
It is important to distinguish between an individual writing beliefs down for the sake of clarifying them and an organization publishing a statement of beliefs. As
noted earlier, beliefs are cognitive phenomena residing in the minds of individuals. The members of an organization may share beliefs or may not. Even if we
assume they share beliefs – or act as if they do because of strong leadership – what is written in a statement for external consumption may or may not reflect the
actual beliefs of the organization. Often these statements reflect aspirations of the organization and/or how it would like to be perceived, which can be different
than the beliefs that actually exist within the minds of the members of the organization. While creating external statements is a very worthwhile exercise, as is
the study of them (Slager and Koedijk (2007)), such statements serve a different purpose than that of an individual writing down beliefs as part of a process of
self-discovery.
6 Investment Belief Systems
7. pretation by a belief system. For example, the tremely valuable as "inversions" – if you have a list
idea that diversification reduces risk has a status of conditions under which something is irrelevant,
close to that of fact, as do many similar princi- the inverse of these conditions constitute the rea-
ples. Bedrock theory is very useful, but it does sons the item matters. For example, Porter’s
not tell us specifically what to do. It can be (1980) five competitive forces are a restatement
thought of as a set of guardrails which keep us of the list of conditions which imply zero profits.
from going off the road should our thinking go This inversion of competitive market theory takes
astray. The big decisions – where to drive, if you an unstructured problem – how to formulate a
will – are still strongly influenced by judgment, strategy for a business – and narrows the focus to
judgment which derives from our belief system five key questions which must be explored and
and the interpretation of all that we deem to be judged. Efficient market theory can play a similar
relevant. role in investment management, as I will discuss in
section IV. The take-away at this point is that a
theory doesn’t have to be “true” to be useful.
INVESTMENT THEORY IS PART OF Often the mere logical structure of a theory
brings focus to the issues one must judge, and
THE TOOL KIT. PROFESSIONALS using theory in this manner is a key tool of belief
SHOULD KNOW WHAT IT CAN AND system management for investment professionals.
CANNOT DO. The role of evidence in managing belief systems
The whole reason investment decisions must rely
A different type of theory is the conceptual on beliefs is that we don’t have enough informa-
framework. These theories help professionals tion to determine the best course of action unam-
think a problem through, help us focus the issues biguously. So we rely on our beliefs to fill in the
needing judging, and help us identify data which gaps. Every time we experience the results of
would be useful to gather. Of particular interest actions which were guided by beliefs, we get
for investment professionals are what economists feedback which enables us to judge how well our
call “irrelevance propositions”. These are theories beliefs filled in those gaps. An adaptive belief
that take the form: "if a certain set of conditions system pays attention to this data, and modifies
are satisfied, then X doesn't matter". For exam- beliefs as appropriate. For example, I suspect
ple: that in the last year many investment profession-
als have refined their beliefs about the potential
The theory of perfect competition speci- for forced de-levering to damage the economy
fies conditions under which economic and investment returns.
profits for the producers in an industry
are zero. While learning from experience – i.e. having an
Efficient market theory specifies condi- adaptive belief system – is an essential aspect of
tions under which excess returns from belief system management, proactive data gather-
active management are expected to be ing on those issues we have identified as needing
zero. judging and using that data to narrow the range of
uncertainty – a proactive belief system – allows
The Modigliani-Miller theorems specify for even more powerful belief system manage-
conditions under which a firm's capital ment. Since this is the kind of belief system man-
structure and dividend policy don't mat- agement one likes to see in an active investment
ter. manager, I discuss this further in the next section
At first blush these theories may not seem useful in the context of evaluating belief systems.
for the business person or investor since they all Evaluating Belief Systems13
seem to imply that the items of interest – profits,
excess returns, financial policy – either don't exist When I evaluate an active investment manager, I
or don't matter. Yet all of these theories are ex- usually try to uncover what I can about the man-
13
Some of the material in this section first appeared in Minahan (2006).
7 Investment Belief Systems
8. ager's belief system, for two reasons. First, an Evaluating belief content
active investment process is designed to exploit a
manager’s beliefs about how superior perform- Every now and then I meet a manager whose be-
ance is generated, so understanding the man- liefs seem to violate bedrock theory. For exam-
ager’s beliefs is central to judging the manager’s ple, some managers pursuing a high dividend yield
investment process. Second, I want to know how strategy cite the "compounding power of rein-
proactive the manager is about using the available vested dividends" as a reason for expecting them
tools to self-assess his investment process and to generate superior performance, as if dividends
beliefs. At the very least I want to see managers somehow compounded more effectively than
with adaptive belief systems, and if they are pro- capital gains. As Alfred Rappaport (2006) has so
active, all the better. While I don't have any hard eloquently pointed out, as a purely mathematical
evidence that adaptive or proactive belief sys- matter, it is total returns that compound; the divi-
sion of returns between capital gains and divi-
dends, all other things equal, has no impact on
how returns compound over time.14
AN ACTIVE INVESTMENT PROCESS
EXPLOITS A MANAGER’S BELIEFS So when I listen to a manager making his case, one
of the questions I am alert to is, does the man-
ABOUT HOW GOOD PERFORM- ager's case seem to rest on any violations of bed-
ANCE IS GENERATED. rock theory? If it does, after making sure I haven't
misunderstood the manager, I usually dismiss
these managers without a second thought. Of
tems affect performance – perhaps some data course there is always the possibility that it is
gathering is appropriate here – I have more confi- merely the marketing pitch that violates the bed-
dence in managers that actively wrestle with rock, and that I may reject a good manager be-
learning and improving using whatever tools they cause of poor marketing. But I am not worried
can get their hands on, formal or improvised. about this. Having a marketing strategy that is at
odds with what the manager actually does is itself
Talking about beliefs is difficult. Most managers a sign that something is wrong with the organiza-
are not accustomed to doing it in a substantive tion. No point in wasting time – on to the next
way. Consequently, approaching the topic di- manager.
rectly (“So, what are your investment beliefs?”)
will likely generate superficial responses. It is bet- With managers that get past the "no-bedrock vio-
ter to let the manager tell his story on his own lations" screen, I would like to have a sense of the
terms, and then seek opportunities to ask follow- managers' beliefs on the following:
up questions which flow from the manager’s story,
but which also serve the purpose of shedding Where do superior opportunities come
light on the manager’s belief system. Often, sim- from? What is it about the workings of
ple questions such as “why do you think that?” or capital markets that cause some opportu-
“why do you expect that to continue?” can go a nities to be available for less than they are
long way to uncovering a manager’s beliefs. worth?
Other times using concepts from capital market What is it about the manager that allows
theory to frame one’s questions increases the him to pick up these opportunities before
mileage of the inquiry. someone else bids the price up?
However the conversation goes, in the end I How does the opportunity set change
would like to have a sense for the content of the over time? What are the underlying
manager's beliefs and for the process by which causes of opportunities changing over
the manager manages his beliefs. Let me discuss time? What is the manager's view on his
each: own possible need to change in response
to a changing opportunity set?
14
There may indeed be reasons to like stocks with a high dividend yield, but compounding power is not one of them.
8 Investment Belief Systems
9. I find efficient market theory extremely helpful in unable to credibly explain how they trade before
guiding an interview so as to uncover answers to their perspective gets into prices. Many manag-
these questions (assuming the manager has an- ers appear to not even think in these terms, but
swers). More specifically, I find inverted efficient instead focus on exploiting past patterns (e.g. "low
market theory helpful. price-book always works in the long-run") or buy-
ing “Mom and apple pie” stocks (e.g. "we only buy
Although there are several variants of efficient the highest qualities companies, the companies
market theory, the basic idea is that the process that made America great"). There is nothing nec-
of trading on information or a point of view essarily wrong with attempting to exploit past pat-
causes that information or view to be reflected in terns or with buying quality companies, but unless
asset prices, and once reflected in prices, the in- a manager can explain why his perspective is not
formation can no longer be used to generate su- reflected in the prices of what he buys and sells,
perior returns. The inverse of this statement is there is no reason to expect he will outperform.18
19
A MARKETING STRATEGY AT ODDS Evaluating belief management
WITH WHAT THE MANAGER ACTU-
The key questions I have regarding a manager's
ALLY DOES IS A SIGN SOMETHING belief management are:
IS WRONG. How does the manager self-evaluate his
investment process? What evidence
this: “If a manager is to generate superior returns does the manager look at to do this?
he must be able to trade on value-relevant infor- Does the firm’s culture support or retard
mation or perspectives before that information greater awareness of potentially uncon-
becomes reflected in price.” This is the value of scious beliefs?
efficient market theory as a logical construct. It
simplifies all the possible reasons for superior I will discuss each in turn:
performance into one focused question: how
does the manager trade before his perspective or How does the manager self-evaluate? The
information is reflected in prices?15 fundamental problem of performance evalua-
tion is that returns have a substantial random
Ultimately, every coherent belief about how to element. This makes it difficult for an evalua-
generate superior returns ought to be able to be tor to conclude that good performance de-
translated into a reason why the manager can rives from successful execution of a sound
trade before his information or perspective is re- investment strategy. This is obviously true for
flected in price. If the manager cannot make this an external evaluator such as myself, but an
translation, I am inclined to assume the manager internal evaluator faces the same problem.
doesn’t have a coherent belief system. 16 17
Some managers don’t put much thought into
Sadly, most traditional managers I interview are self-evaluation. If performance relative to a
15
Most reasons for being able to trade before price reflects one's perspective fall into one or more of three categories: the manager has an information gathering
advantage; the manager is able to make more accurate predictions with the same information; or the manager is able to react more quickly when circumstances are
changing rapidly and prices have not yet found an equilibrium.
16
I am often challenged on this point. Critics say that it is not uncommon for talented managers to be inarticulate, so one doesn’t know what to conclude if a man-
ager can’t explain himself. I think there is merit to this point of view if one is talking about an individual. However, investment management firms put enormous
effort and expense into articulating their stories. If, despite this, they can’t explain something as basic as how they view and exploit the opportunity set, I don’t see
how one can come to any conclusion other than the firm doesn't have a coherent view of how they generate value for their clients.
17
Another challenge I receive is that some managers don’t wish to reveal how they generate superior returns. I think this is a legitimate issue, but it doesn’t really
come up that much in practice. Most managers want to provide consultants with whatever it will take for the consultant to get comfortable with their process.
18
It is important to note that not all managers fail this test. Some managers understand that trading ahead of price is the central issue, and are very good at ex-
plaining how the opportunity arises and how they exploit it. I have had somewhat better experience with alternatives managers than traditional managers in this
regard, but in both camps there are managers who do this very well.
19
Even when a manager can offer a plausible reason for superior performance, there remains the question as to whether there is any evidence that the plausible
reason is the actual reason. It can be very difficult to generate such evidence, but as an evaluator I want to see that the manager has tried. Any manager that is
seriously attempting to outperform realizes that he has as much at stake as anyone in understanding whether good performance actually derived from the man-
ager's strategy or just good fortune.
9 Investment Belief Systems
10. benchmark or peer universe is good, they mark) is not sufficient to come to that
stop there. If performance is poor they may conclusion. Therefore, such managers
put more effort into analysis so as to craft a seek additional indicators that the proc-
favorable spin on the situation. These are not ess is working. For example:
the managers I want to hire.
A manager who predicts earnings can
I prefer to hire a manager who is driven to track the accuracy of these predictions.
make honest and careful assessments of his
investment process in good times and bad, A manager who predicts bond upgrades
and who understands that good performance and downgrades can track those predic-
can occur for reasons other than successful tions.
execution of the investment strategy. That is, A manager who develops a fundamental
I prefer a manager with a proactive belief sys- view of the future can confirm whether
the future actually plays out as pre-
EFFICIENT MARKET THEORY IS EX- dicted.
TREMELY HELPFUL IN GUIDING AN The key is that a manager recognizes that
there is a wide variety of data that can bear
INTERVIEW WITH A MANAGER.
on self-evaluation, and proactively seeks out
and uses the data available. If a manager
tem with respect to self-evaluation of their does not do this, it seems fair to conclude
investment process. There are two things that it is not important to the manager to im-
such a manager can do to partially mitigate prove over time.
the fundamental problem of performance
evaluation: Does the firm culture support or retard
greater awareness of beliefs? A strong cul-
Get the benchmark right.20 This ought to ture is usually viewed as a good thing. How-
go without saying. Yet the overwhelming ever, since all the members of a culture by
majority of managers I review use a definition share a set of unconscious assump-
benchmark that is not meaningfully con- tions, a risk of a strong culture is a weak capa-
nected to either the investment process bility for surfacing beliefs. Below I give you
or a reasonably specified passive alterna- two examples of how firms have dealt with
tive. The simplest example of this is a this, one where culture is used to enhance
manager that selects securities from a awareness and one where it seemed to re-
universe materially different than the in- duce awareness.
dex to which the manager is compared.
Externally, a manager may have no choice Using subcultures to enhance awareness.
about their benchmark. Internally, they I once reviewed a manager whose invest-
can use whatever they find most useful. If ment process had two independent sub-
they are not careful about this choice, processes, one quantitative and one fun-
that tells me they are not serious about damental. Each sub-process was run
self-assessment. separately, but then each group critiqued
the other’s stock picks, and where they
Supplement performance data with non- disagreed, each had to explain what they
performance indicators of process suc- thought the other was missing. These de-
cess. A manager with a proactive belief bates were used to identify blind spots in
system wants to know if his process is both sub-process, and to improve them
working, and recognizes that good per- over time.
formance (even relative to a good bench-
20
Benchmarks are essential. As Waring and Siegel (2006) have argued, the universal goal of all active management is to add value over a benchmark. “Benchmark-
free” investing is more a matter of not being clear about what the benchmark should be than it is an actual style of investing.
10 Investment Belief Systems
11. Hiring practices and culture. Another 3. Beliefs are cognitive phenomena, but also
manager I once reviewed emphasized that have a cultural aspect. We illustrated how
they always hired inexperienced analysts differing beliefs about LDI seem to be deter-
and then trained them in their way of do- mined by professional or occupational cul-
ing things. All of the senior investment ture. We also showed how different beliefs
people in the firm started as junior ana- about style discipline contributed to the cul-
lysts. They considered this to be a posi- tural dynamics both within and between
tive thing, as it ensured consistency in money management and consulting firms.
their approach. However, it raised con-
cerns in me about inbreeding. So I asked 4. When different cultures interact, there is
for clarification: did they never hire ex- potential for both great misunderstanding
perienced analysts or was it just uncom- and for great learning. The LDI and style
analysis examples illustrated the potential for
misunderstanding and bewilderment when
observing the behavior of someone with dif-
WHEN I EVALUATE A MANAGER, I
ferent beliefs. Multi-cultural interaction also
WANT TO KNOW HOW THE INVEST- provides a vehicle for surfacing the unexam-
MENT FIRM EVALUATES ITSELF. ined assumptions of a culture, and is conse-
quently a powerful tool of belief system man-
agement.
mon? They responded that a few times
they hired experienced analysts but they 5. Culturally-based belief systems resist
never worked out. The analysts’ thinking change. The cultural dynamics of organiza-
had been too “contaminated” by the out- tions leads to social validation of conforming
side world and could not adjust to the beliefs and ostracizing of deviant beliefs. This
culture of this firm. So the firm “learned” makes it difficult for beliefs to change. This
from this experience that they shouldn’t can be a good thing if the organization is in a
hire experienced analysts. I came to a stable environment and the belief system
different conclusion. “works” in that environment.
Summary 6. Sometimes belief systems must change. In a
rapidly changing world, adapting to and even
1. Beliefs permeate the investment business. anticipating change is necessary. This means
All investment decisions are framed by beliefs that some beliefs which previously helped an
about appropriate objectives, about how to organization to excel may become dysfunc-
assess opportunities, and about how to organ- tional. A key task of belief system manage-
ize an investment program. Our beliefs can ment and of leadership more generally is bal-
determine what we pay attention to and what ancing the value of cultural stability with the
we consider important. need to change.
2. Beliefs matter. Important decisions can hinge 7. The first step to proactively managing beliefs
on beliefs as much as on facts. Beliefs may is to become more aware of them. Writing
shape what options we even consider. We your beliefs down, reflecting on situations
illustrated this using the example of liability- which surprise you, and exposing yourself to
driven investing, where we saw that attitudes different cultures are all useful techniques for
towards whether or not to consider LDI surfacing and clarifying beliefs.
hinged on seemingly unconscious beliefs
about the comparative relevance of account- 8. Cross referencing beliefs with investment
ing and economic frames of reference. theory is also a useful belief management
tool. Theory can bring focus to the issues
which must be judged and can identify data
which, if gathered, would narrow the range of
11 Investment Belief Systems
12. uncertainty in those judgments. Of particular Philosophy in Evaluating Investment Managers: a
help in investment management is "inverted" Consultant's Perspective on Distinguishing Alpha
efficient market theory, which simplifies all from Noise." Journal of Investing, Summer 2006
the possible reasons for superior perform-
ance into a focused question: how does a Porter, Michael. (1980). Competitive Stratergy:
manager trade before his point of view is re- Techniques for Analyzing Industries and Competi-
flected in prices? tors. The Free Press.
9. Evaluating belief systems is a key part of as- Rappaport, Alfred. (2006). “Dividend Reinvest-
sessing active managers. All attempts to gen- ment, Price Appreciation, and Capital Accumula-
erate superior performance are based on a tion.” Journal of Portfolio Management, Spring
belief system regarding how the capital mar- 2006
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