Accounting & Management

- October 2023
- Article
Health System Perspective on Cost for Delivering a Decision Aid for Prostate Cancer Using Time-Driven Activity-Based Costing

By: David R. Ho, Robert S. Kaplan, Jonathan Bergman, David F. Penson, Benjamin Waterman, Kristin C. Williams, Jefersson Villatoro, Lorna Kwan and Christopher S. Saigal

Previsit decision aids (DAs) have been shown to improve decisional quality. But the cost to deploy a DA has not been previously estimated. We interviewed or observed relevant personnel at three institutions that had implemented DA programs for men with prostate cancer. We used time-driven activity-based costing to estimate cost. Total average costs (USD) per patient were $38 (UCLA), $60 (Olive View-UCLA), and $42 (Vanderbilt), respectively, with labor costs being the largest component. Electronic health record (EHR) integration streamlined DA delivery efficiency and produced substantial cost savings. DA use was also associated with shorter clinic visit length and high levels of decision quality.
- October 2023
- Article
Health System Perspective on Cost for Delivering a Decision Aid for Prostate Cancer Using Time-Driven Activity-Based Costing

By: David R. Ho, Robert S. Kaplan, Jonathan Bergman, David F. Penson, Benjamin Waterman, Kristin C. Williams, Jefersson Villatoro, Lorna Kwan and Christopher S. Saigal

Previsit decision aids (DAs) have been shown to improve decisional quality. But the cost to deploy a DA has not been previously estimated. We interviewed or observed relevant personnel at three institutions that had implemented DA programs for men with prostate cancer. We used time-driven activity-based costing to estimate cost. Total average...
- August 2023
- Case
Plug Power (A)

By: Jonas Heese, Joseph Pacelli and James Barnett

Set immediately after a December 2019 short-seller attack, the case explores Plug Power’s long challenging history. It then focuses on two key issues raised in the short-seller report related to lease accounting and stock warrants that Plug purportedly used to boost profits.
- August 2023
- Case
Plug Power (A)

By: Jonas Heese, Joseph Pacelli and James Barnett

Set immediately after a December 2019 short-seller attack, the case explores Plug Power’s long challenging history. It then focuses on two key issues raised in the short-seller report related to lease accounting and stock warrants that Plug purportedly used to boost profits.
- August 2023
- Case
Floward

By: Krishna Palepu and Namrata Arora

In 2022, Abdulaziz B. Al Loughani, CEO and co-founder of Floward, an online flower and gifting company established in Kuwait in 2017, contemplated the firm's growth trajectory. Floward, an e-commerce enterprise that offered fresh-cut flowers sourced directly from global growers and had control over the entire delivery chain, had expanded its footprint to 32 cities across nine MENA countries and had ventured into the UK. Witnessing a remarkable CAGR of over 160% between 2020 and 2022, Floward was valued at $152.5 million during its Series B investment round in 2021. Having served over 400,000 customers and recently diversifying into the broader gifting sector, Al Loughani faced pivotal decisions: Should Floward pursue further global expansion or solidify its gifting vertical in the Gulf? And, considering its aggressive growth aspirations, should the company opt for an IPO, and if so, which stock exchange should they target?
- August 2023
- Case
Floward

By: Krishna Palepu and Namrata Arora

In 2022, Abdulaziz B. Al Loughani, CEO and co-founder of Floward, an online flower and gifting company established in Kuwait in 2017, contemplated the firm's growth trajectory. Floward, an e-commerce enterprise that offered fresh-cut flowers sourced directly from global growers and had control over the entire delivery chain, had expanded its...

About the Unit

The Accounting & Management unit at Harvard Business School strives to be the worldwide leader in research, course development, and teaching on top managements' use of performance measurement systems to:

Communicate with external investors to ensure that their firms' securities are fairly priced and that they are able to access capital,
Measure and evaluate their firms' economic performance,
Improve resource allocation and strategy implementation within their firms, and
Build accountability for performance through effective external and internal governance.

Unit research, course development, and teaching fall into two broad areas: Financial Reporting and Analysis and Management Accounting. Our research helps scholars and educators understand current best practices for the design and use of performance measurement systems that help managers to build more effective, value-creating organizations. Our teaching materials enable us to bring the results of this research into the classroom, and to practice.

Recent Publications

Health System Perspective on Cost for Delivering a Decision Aid for Prostate Cancer Using Time-Driven Activity-Based Costing

By: David R. Ho, Robert S. Kaplan, Jonathan Bergman, David F. Penson, Benjamin Waterman, Kristin C. Williams, Jefersson Villatoro, Lorna Kwan and Christopher S. Saigal

October 2023 |
Article |
Medical Care

Previsit decision aids (DAs) have been shown to improve decisional quality. But the cost to deploy a DA has not been previously estimated. We interviewed or observed relevant personnel at three institutions that had implemented DA programs for men with prostate cancer. We used time-driven activity-based costing to estimate cost. Total average costs (USD) per patient were $38 (UCLA), $60 (Olive View-UCLA), and $42 (Vanderbilt), respectively, with labor costs being the largest component. Electronic health record (EHR) integration streamlined DA delivery efficiency and produced substantial cost savings. DA use was also associated with shorter clinic visit length and high levels of decision quality.

Keywords: Time-Driven Activity-Based Costing; Health Care and Treatment; Cost Accounting; Health Industry

Citation

Read Now

Plug Power (B)

By: Jonas Heese, Joseph Pacelli and James Barnett

August 2023 |
Supplement |
Faculty Research

The case is set in spring 2021, immediately after Plug Power made financial restatements dating back to 2018. The case describes the restatements, which revealed that Plug was reclassifying expense items to boost gross profits.

Keywords: Accounting; Environmental Accounting; Financial Reporting; Ethics; Finance; Management; Social Enterprise; Energy Industry; Green Technology Industry; United States; Europe

Citation

Plug Power (A)

By: Jonas Heese, Joseph Pacelli and James Barnett

August 2023 |
Case |
Faculty Research

Set immediately after a December 2019 short-seller attack, the case explores Plug Power’s long challenging history. It then focuses on two key issues raised in the short-seller report related to lease accounting and stock warrants that Plug purportedly used to boost profits.

Keywords: Accounting; Environmental Accounting; Financial Reporting; Ethics; Finance; Management; Social Enterprise; Energy Industry; Green Technology Industry; United States; Europe

Citation

Educators

Floward

By: Krishna Palepu and Namrata Arora

August 2023 |
Case |
Faculty Research

In 2022, Abdulaziz B. Al Loughani, CEO and co-founder of Floward, an online flower and gifting company established in Kuwait in 2017, contemplated the firm's growth trajectory. Floward, an e-commerce enterprise that offered fresh-cut flowers sourced directly from global growers and had control over the entire delivery chain, had expanded its footprint to 32 cities across nine MENA countries and had ventured into the UK. Witnessing a remarkable CAGR of over 160% between 2020 and 2022, Floward was valued at $152.5 million during its Series B investment round in 2021. Having served over 400,000 customers and recently diversifying into the broader gifting sector, Al Loughani faced pivotal decisions: Should Floward pursue further global expansion or solidify its gifting vertical in the Gulf? And, considering its aggressive growth aspirations, should the company opt for an IPO, and if so, which stock exchange should they target?

Keywords: Information Technology Industry; Middle East; North Africa; Saudi Arabia; Kuwait; United Arab Emirates; Jordan

Citation

Educators

Vanderbilt: Transforming an Academic Health Care Delivery System, 2020

By: Michael E. Porter, Robert S. Kaplan, Mary L. Witkowski and David N. Bernstein

August 2023 |
Teaching Note |
Faculty Research

Teaching Note for HBS Case No. 724-373.

Keywords: Health Care; Health Care Industry; Academic Medicine; Value-based Health Care; Value-based Healthcare; Health Care Delivery; Service Delivery; Transformation; Health Care and Treatment; Corporate Strategy; Leadership; Health Industry; Tennessee; United States

Citation

Purchase

Vanderbilt: Transforming an Academic Health Care Delivery System, 2020

By: Michael E. Porter, Robert S. Kaplan, Mary L. Witkowski and David N. Bernstein

August 2023 |
Case |
Faculty Research

Citation

Educators

Purchase

Do Rating Agencies Behave Defensively for Higher Risk Issuers?

By: Samuel B. Bonsall IV, Kevin Koharki, Pepa Kraft, Karl A. Muller III and Anywhere Sikochi

August 2023 |
Article |
Management Science

We examine whether rating agencies act defensively toward issuers with a higher likelihood of default. We find that agencies' qualitative soft rating adjustments are more accurate as issuers' default risk grows, as evidenced by the adjustments leading to lower Type I and Type II error rates and better prediction of default and default recovery losses. We also find that soft adjustments' relevance increases with issuers' default risk, as evidenced by the adjustments being more predictive of initial offering yields and leading to a greater market reaction to rating changes. Further, we find that the rating agencies assign better educated and more experienced analysts to higher risk issuers, providing evidence of one mechanism used by the rating agencies to generate more accurate and relevant soft adjustments. Overall, our study suggests that as the likelihood of issuer default grows the threat of reputational harm from discovered rating failures increasingly mitigates the rating agencies' strategic behavior incentivized by the issuer-pay model.

Keywords: Credit Rating Agencies; Soft Rating Adjustments; Default; Credit; Performance Evaluation; Measurement and Metrics; Financial Institutions; Risk Management

Revenue Recognition at Stride Funding: Making Sense of Revenues for a Fintech Startup

By: Paul M. Healy and Jung Koo Kang

July 2023 (Revised August 2023) |
Case |
Faculty Research

The case explores the challenges of revenue recognition and financial reporting for Stride Funding (Stride), a fintech startup that has disrupted the student loan market. Stride leveraged proprietary machine learning and financial models to underwrite alternative student loans via Income Sharing Agreements (ISA). Under an ISA, borrowers agree to share a portion of their future earned income with a lender for a set period of time. Stride has adopted a distinctive business model that is analogous to the Software as a Service (SaaS) business. Rather than issuing ISAs directly, Stride performed as a program manager and created lending platforms that enabled educational institutions and programs to fund ISAs using their own capital. As a fund manager, Stride was responsible for developing credit models, administering the ISA contracts, managing account status, producing the loan documents, and updating the platform and program structure. In return for their services, Stride charged various fees to the institutions and programs. Having successfully completed its Series A round, Stride experienced substantial growth and improved business performance. As the company grew, its executives recognized the need to change its current financial reporting based on cash accounting to comply with U.S. GAAP. They anticipated that this change would affect how to report some of its revenues which are important financial metrics for early-stage companies like Stride. The CEO of Stride Funding wanted to know the full financial impact of this change and its implications for the next funding round. Moreover, they needed to determine whether it made sense for Stride, with its innovative business model, to adopt the GAAP reporting at this juncture.

Keywords: Financial Services Industry; United States