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• Background Note | HBS Case Collection | June 2014 (Revised November 2020)

  Board of Directors: An Introductory Note

  Charles C.Y. Wang, Selina Jan and Kyle Thomas

  Citation:

  Wang, Charles C.Y., Selina Jan, and Kyle Thomas. "Board of Directors: An Introductory Note." Harvard Business School Background Note 114-096, June 2014. (Revised November 2020.)  View Details

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• Case | HBS Case Collection | June 2020 (Revised July 2020)

  Accounting for Leases at American Airlines (A)

  Jonas Heese, Gerardo Pérez Cavazos and Julia Kelley

  In March 2020, as coronavirus reduced demand for air travel, an analyst was forecasting American Airlines’ (American’s) first quarter financial results. To develop a forecast, she needed to familiarize herself with Accounting Standards Update (ASU) 2016-02, “Leases (Topic 842),” passed four years earlier by the Financial Accounting Standards Board. ASU 2016-02 required companies to disclose all leases on their balance sheets, but it made an exception for leases with variable payments, allowing companies to leave such leases off-balance sheet. The Wall Street Journal estimated that more than 50% of American’s leases remained off-balance sheet due to the exclusion of variable leases. Should American and other companies be allowed to leave variable lease payments off-balance sheet? How did the decision to leave these payments off-balance sheet affect companies’ risk profiles and valuations?

  Keywords: Accounting; Financial Reporting; Financial Statements; Finance; Governance; Corporate Accountability; Corporate Governance; Governing Rules, Regulations, and Reforms; Governing and Advisory Boards; Leasing; Accounting Industry; Air Transportation Industry; North and Central America; United States;

  Citation:

  Heese, Jonas, Gerardo Pérez Cavazos, and Julia Kelley. "Accounting for Leases at American Airlines (A)." Harvard Business School Case 120-069, June 2020. (Revised July 2020.)  View Details

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• Article | Accounting Review | July 2020

  Who Should Select New Employees, Headquarters or the Unit Manager? Consequences of Centralizing Hiring at a Retail Chain

  Carolyn Deller and Tatiana Sandino

  We examine how changing the allocation of hiring decision rights in a multiunit organization affects employee-firm match quality, contingent on a unit’s circumstances. Our research site, a U.S. retail chain, switched from a decentralized hiring model (hiring by business unit managers—in our case, store managers) to centralized hiring (in this study, by the head office). While centralized hiring can ensure that enough resources are invested in hiring people aligned with company values, it can also neglect the unit managers’ local knowledge. Using difference-in-differences analyses, we find that the switch is associated with relatively higher employee departure rates and thus poorer matches if the business unit manager has a local advantage; that is, if the store serves repeat customers, serves a demographically atypical market, or poses higher information-gathering costs for headquarters. In these cases, the unit manager may be more informed than headquarters about which candidates best match local conditions.

  Keywords: control; selection; Decentralization; company values; retail chains; Employees; Selection and Staffing; Local Range; Business Headquarters; Decision Making;

  Citation:

  Deller, Carolyn, and Tatiana Sandino. "Who Should Select New Employees, Headquarters or the Unit Manager? Consequences of Centralizing Hiring at a Retail Chain." Accounting Review 95, no. 4 (July 2020): 173–198.  View Details

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