University at Buffalo School of Management

cultures, but may frustrate others who wish they'd toe the company line. So, which moral philosophy is best? None were consistently better or worse than the others, the study found. Instead, Lemoine says, it's critical to recognize the positive impact of morality overall and understand how your approach may dif- fer from those of your organization and followers. "Morality is a great thing to incorpo- rate into your leadership style," he says. "But just because we consider something 'moral,' we can't assume everyone else does. It's important to get those differenc- es out in the open and discuss them to avoid misunderstandings." Lemoine's co-authors were Chad A. Hartnell, assistant professor in Georgia State's J. Mack Robinson College of Business, and Hannes Leroy, assistant pro- fessor in Erasmus University's Rotterdam School of Management. x How drug companies use the stock market to inform their advertising budgets When stock mar- ket returns are high- er than expected, drug companies increase their advertising bud- gets—and the adver- tising is more effective —according to new School of Management research. Published in the Journal of Marketing Research, the study found that the initial valuation of a new drug provides a unique perspective on corporate marketing strategy. "When a firm plans to launch a new product, it looks for signals on how well a product will be re- ceived before establishing a mar- keting budget," says study author Inho Suk, associate professor of ac- counting and law. "For drug compa- nies, information from the capital market's perceptions of a new drug plays an important role in marketing decisions." The researchers analyzed more than 500 drug development projects over the 12 years aer the FDA re- laxed its regulation on ethical drug advertising on television in 1997. They focused on drugs targeted for a U.S. launch to analyze corresponding daily stock return data. Suk says information from the capital market valuations of new products can be used to make deci- sions even beyond marketing. "Financial analysts can improve the accuracy of their earnings fore- casts, and stock purchase and sales recommendations by taking into account their predictions on the marketing managers' advertising de- cisions," he says. Suk collaborated on the study with Pradeep Chintagunta, the Joseph T. and Bernice S. Lewis Distinguished Service Professor of Marketing, University of Chicago Booth School of Business; and Kyung Park, visiting faculty in marketing, Purdue University Krannert School of Management. x Suk Spring 2019 Buffalo Business 21

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