- 07 Jan 2013
- Lessons from the Classroom
Culture Changers: Managing High-Impact Entrepreneurs
In her new Harvard Business School course, Creative High-Impact Ventures: Entrepreneurs Who Changed the World, professor Mukti Khaire looks at ways managers can team with creative talent in six "culture industries": publishing, fashion, art-design, film, music, and food. Closed for comment; 0 Comments.
- 07 Nov 2012
- HBS Case
HBS Cases: Sir Alex Ferguson--Managing Manchester United
For almost three decades, Sir Alex Ferguson has developed the Manchester United soccer club into one of the most recognized sports brands in the world. Professor Anita Elberse discusses the keys to Sir Alex's long-time success. Closed for comment; 0 Comments.
- 10 Sep 2012
- HBS Case
HBS Cases: Branding Yoga
As yoga's popularity has grown into a $6 billion business, a cast of successful entrepreneurs has emerged with their own styles of the ancient practice. Yet yoga's rise underscores a larger question for Professor Rohit Deshpandé: Is everything brandable? Closed for comment; 0 Comments.
- 29 Mar 2012
- Working Paper Summaries
An Exploration of Luxury Hotels in Tanzania
Tanzania is justly famous for its incredible natural landmarks such as the Rift Valley, Ngorongoro Crater, Lake Manyara, Mount Kilimanjaro, Zanzibar, and, above all, the Serengeti and the Great Migration. Why, despite being so richly endowed in touristic resources, does Tanzania receive relatively few tourists and little revenue from tourism? Diego Comin explored the drivers and influencing factors on the size of the tourism sector, using as a starting point the abnormally high prices of upscale hotels in Tanzania, especially in the safari areas. Findings suggest that the cost of supplying upscale hotel services is not sufficient to explain the abnormally high prices, and the more likely candidate is high markups. Interviews with hotel managers supported this conclusion. In addition, while cross-country differences in demand are large, once we control for these differences, discrepancies in upscale hotel prices account for a significant share of cross-country differences in demand, and cross-country differences in demand are very persistent. On the basis of the role of word-of-mouth, learning by doing, and pecuniary externalities in driving differences in demand, there may be room for the Tanzanian government to induce lower hotel prices and to try to independently increase the foreign perception of the country's attractiveness. Key concepts include: Despite its world-famous natural resources, Tanzania receives surprisingly few tourists and little revenue from tourism. In 2008, for example, revenues from tourism in that year brought US$17 per inhabitant, the 22nd lowest out of 137 countries surveyed. Hotels in the safari area in Tanzania are expensive, and this difference in price cannot be accounted by differences in supply constraints: It must be largely due to differences in markups. Once we take into account cross‐country differences in demand, upscale hotel prices account for a significant fraction of cross‐country differences in tourism. Closed for comment; 0 Comments.
- 21 Mar 2012
- Op-Ed
Finding the Right Jeremy Lin Storyline
New York Knicks sensation Jeremy Lin is confounding every stereotype we have about modern day basketball stars. Professor Lakshmi Ramarajan suggests that Lin's complex storylines can help us put our own prejudices in focus. Closed for comment; 0 Comments.
- 17 Jan 2012
- Working Paper Summaries
Expectations, Network Effects and Platform Pricing
In markets with network effects, the value that users gain from platforms depends on the number of other users of the same type who join the same platform (direct network effects) or the number of users of a different type that join (cross-group network effects). Examples include social networks like Facebook or Google+, payment systems like PayPal or Visa, videogame systems like PlayStation 3 and Xbox 360, smartphone platforms like Apple's iPhone or Google's Android, etc. Users typically rely on the media, market reports, or word of mouth to form expectations about the total number of other users that join a given platform. However, most of the time these users are unable to calculate the effect of platforms' prices on adoption by other users. In other words, they do not take price into account when forming expectations. To analyze platform profits, Andrei Hagiu and Hanna Hałaburda model different degrees of user sophistication in forming price expectations in markets with network effects. They show that firms have different preferences regarding the average sophistication of their user base depending on market structure. Key concepts include: Firms with market power always prefer to face more sophisticated users, while firms competing for share in a market of fixed size always prefer to face more unsophisticated users. Firms' preferences create different incentives to educate users about the effects of prices under different market structures. Specifying how expectations are formed is key to accurately estimating the strength of network effects and the impact of prices on demand. Closed for comment; 0 Comments.
- 09 Jan 2012
- Working Paper Summaries
When to Sell Your Idea: Theory and Evidence from the Movie Industry
How completely should an innovator develop his idea before selling it? HBS assistant professor Hong Luo addresses this question in a theoretical framework that links the sales stage to the innovator's "observable quality." She uses the context of Hollywood movie script writing-looking at whether it's better to pitch the mere idea for a film or to write the entire screenplay and then try to sell it "on spec." Key concepts include: Pitching an idea before a script is written can be advantageous in that it affords the opportunity to get early feedback from a prospective buyer, and saves time for the writer if the buyer thinks the idea is worthless. However, pitching comes with the risk of expropriation. Lesser-known, inexperienced writers are excluded from the market for pitches, forcing them to either fully develop the idea or drop it entirely. Writers who have a choice in the matter tend to sell their better ideas on spec-turning them into fully-formed screenplays before introducing them to prospective buyers. But they will pitch their worse ideas at an early stage. Closed for comment; 0 Comments.
- 10 Nov 2011
- HBS Case
HBS Cases: Making Lincoln Center Cool Again
When Reynold Levy took over as president of New York's Lincoln Center for the Performing Arts, he faced challenges ranging from crumbling buildings to an aging customer base. How could the venerable institution get its high notes back? Key concepts include: The case teaches about budgets in tight fiscal times, managing challenging groups of constituents and board members, using technology wisely, and planning for a future in the digital world. It also shows that there are alternative paths for a CEO to take—and that a strong organizational leader can make up for many organizational shortcomings. Open for comment; 0 Comments.
- 26 Sep 2011
- HBS Case
HBS Cases: Lady Gaga
What goes into creating the world's largest pop star? Before her fame hit, Lady Gaga's manager faced decisions that could have derailed the performer's career. A new case by Associate Professor Anita Elberse examines the strategic marketing choices that instead created a global brand. Closed for comment; 0 Comments.
- 31 Aug 2011
- Research & Ideas
Improving Fairness in Flight Delays
Airlines and the FAA don't like flight delays any more than passengers, but what's to be done? Assistant Professor Douglas Fearing and colleagues propose a "fairness" system that could save travelers time and service providers millions of dollars annually. Key concepts include: The model could reduce flight delays by 4 percent or more on some of the worst travel days, resulting in a systemwide savings of $25 to $50 million annually. Closed for comment; 0 Comments.
- 20 Jun 2011
- Lessons from the Classroom
Fame, Faith, and Social Activism: Business Lessons from Bono
Many executives struggle to balance work, family, and community, but for rock star Bono the effort is spread across the globe. In the HBS case "Bono and U2," professor Nancy F. Koehn discusses key business lessons to be learned from the famous band. Key concepts include: Take stock of how you are using your funds, your authority, and your people. A leader's mission and purpose isn't static; it evolves. The mission of the CEO should be related to the organization's performance. Who you are and what you stand for as an organization have great relevance to the people who buy your product. Closed for comment; 0 Comments.
- 02 May 2011
- Research & Ideas
Casino Payoff: Hands-Off Management Works Best
Micromanagers beware: Research of casino hosts by Harvard Business School's Dennis Campbell and Francisco de Asís Martinez-Jerez and Rice's Marc Epstein makes the case that hands-off management can work to improve employee learning and decision making. Closed for comment; 0 Comments.
- 04 Jan 2011
- Working Paper Summaries
The Learning Effects of Monitoring
It's a challenge that all good managers face: How do you strike the right balance between encouraging autonomy among your employees and mitigating the risk that they'll make bad decisions? Using both field and quantitative data from the MGM-Mirage Group, this paper discusses how management controls affect the learning rates of lower-level employees. Research, focusing on hotel casino hosts, was conducted by Dennis Campbell and Francisco de Asís Martinez-Jerez of Harvard Business School and Marc Epstein of Rice University. Key concepts include: Tightly monitored employees were less likely to make independent decisions, even if their job descriptions allowed them to do so. They were even less likely to adjust their decisions to account for information they could easily show to their superiors to justify those decisions. The lower frequency of experimentation in their decision-making leaves employees in tightly monitored environments with few opportunities to learn. The researchers question whether employees in these micromanaged environments made up for the lack of experimentation by paying more attention to and learning more from each experiment. The researchers found strong learning effects among employees in settings where they were monitored by their bosses somewhat loosely. In settings where they were more tightly monitored, employees learned very little. Closed for comment; 0 Comments.
- 26 Oct 2010
- Working Paper Summaries
When Does a Platform Create Value by Limiting Choice?
Platforms such as video games and smartphones need to attract users, and the best way to do so is to offer more and more applications. Is there ever a point where a platform should limit the variety available? Researchers Ramon Casadesus-Masanell and Hanna Halaburda observe that in many situations users enjoy consuming applications together. When such consumption complementarities are present, users may benefit if the platform limits choice. With fewer applications to choose from, it is easier for users to take full advantage from shared consumption. Key concepts include: Platforms have traditionally encouraged user adoption by providing as many applications as possible. This works because users value having more choices. When users prefer both using many applications and using the same applications as other users (multiplayer video games, for example), they face a trade-off. As it turns out, there is the tendency to use too many applications, a situation similar to a Prisoners' Dilemma: everybody would be better off consuming fewer applications but each user individually has the desire to consume more. By limiting the number of applications, the platform prevents users from consuming too many applications. If there are many applications to choose from, it is less likely that users will purchase the same set. In this case, limiting the number of applications helps the users coordinate on the same set. To limit choice, the platform has a variety of direct and indirect alternatives including imposition of high prices for developers to access the platform or directly restricting the number of applications available. The insight to practitioners is that maximizing the number of applications available is not always the best strategy for platforms. Instead, actively managing the number of applications may result in substantial value creation, which could be captured though access fees. Closed for comment; 0 Comments.
- 07 Jun 2010
- Research & Ideas
Improving Brand Recognition in TV Ads
Advertisers pay millions of dollars to air TV ads that are subsequently ignored by a third of viewers. New research by HBS professor Thales S. Teixeira offers a simple, inexpensive solution for marketers to retain brand recognition. Key concepts include: Repeating or "pulsing" brief images of a brand can significantly reduce the likelihood that viewers will zap it. Altering commercials to mimic a pulsing strategy is a virtually cost-free fix for a significant payoff. Viewers' attention should be managed as any other scarce resource. Closed for comment; 0 Comments.
- 05 Apr 2010
- Research & Ideas
HBS Cases: iPads, Kindles, and the Close of a Chapter in Book Publishing
Book publishing is changing before our very eyes, even if the industry itself is fighting the transition with every comma it can muster. Harvard Business School professor Peter Olson, former CEO of Random House, wonders if books themselves may be in jeopardy. Key concepts include: The traditional book publishing and distribution system is under pressure to change to digital e-books. Publishers should consider a strategy of cooperation rather than competition with online retailers. Adding video and other multimedia capabilities will make e-books more attractive in the textbook industry. The fundamental question to be asked in the Internet age is, how popular will books remain? Closed for comment; 0 Comments.
- 01 Jul 2009
- Working Paper Summaries
File-Sharing and Copyright
The researchers argue that file-sharing technology has not undermined the incentives of artists and entertainment companies to create, market, and distribute new works. The advent of new technology has allowed consumers to copy music, books, video games, and other protected works on an unprecedented scale at minimal cost. Such technology has considerably weakened copyright protection, first of music and software and increasingly of movies, video games, and books. While policy discussion surrounding file-sharing has largely focused on the legality of the new technology and the question of whether declining sales in music are due to file-sharing, the debate has been overly narrow. Copyright protection exists to encourage innovation and the creation of new works—in other words, to promote social welfare. This essay analyzes the landscape and identifies areas for more research. Key concepts include: Digital technology has lowered the cost of producing movies and music and allowed artists to reach their audience in novel ways. It's difficult to argue that weaker copyright protection has had a negative impact on artists' incentives to be creative. File-sharing has not discouraged authors and publishers. The publication of new books rose by 66 percent over the 2002-2007 period. Since 2000, the annual release of new albums has more than doubled, and worldwide feature film production since 2003 is up by more than 30 percent. How markets for complementary goods (such as concerts, electronics, and communications infrastructure) have responded to file-sharing remains largely unexplored in academic research. Closed for comment; 0 Comments.
- 03 Jun 2009
- Working Paper Summaries
It Is Okay for Artists to Make Money…No, Really, It’s Okay
When art and commerce are mentioned in the same sentence, many people become bad tempered or think something needs fixing. This paper argues that more artists ought to make more money more often. HBS professor Robert Austin and theater dramaturg Lee Devin identify and undermine three fallacies about art and commerce, and suggest that it is necessary to carry on a more careful and less emotional conversation about the tensions between art and business and to overcome a general aversion to business common among artists and their patrons. They also stress the need to develop better theories about how art and commerce can achieve integration helpful to both. Key concepts include: The interests of art, artists, and business can be best served if more commerce enters into the world of art, not less. There are three fallacies, often implicit, about relationships between art and commerce: (1) art is a luxury and an indulgence, (2) art is clearly distinguishable from "non-art," and (3) commerce dominates and corrupts art, and subverts its purpose. Good art should achieve appropriate commercial value consistently, not just occasionally. A conversation takes place when art and commerce are in tension, a conversation in which neither artists nor managers should dominate. Closed for comment; 0 Comments.
- 29 Oct 2008
- Research & Ideas
The Next Marketing Challenge: Selling to ’Simplifiers’
The mass consumption of the 1990s is fast fading in the rearview mirror. Now a growing number of people want to declutter their lives and invest in experiences rather than things. What's a marketer to do, asks professor John Quelch. Key concepts include: As the world economy slumps, one consumer segment will grow faster than ever: The Simplifiers. Simplifiers present a challenge to marketers. These are well-off people who value quality over quantity and who do not buy proportionately more goods as their net worth increases. Dining out, foreign travel, and learning a new sport will all prove more resilient than expected in the face of recession. Closed for comment; 0 Comments.
HBS Cases: LEGO
LEGO toys have captivated children and their parents for 80 years. But managing the enterprise has not always been fun and games. Professor Stefan H. Thomke explains the lessons behind a new case on the company. Closed for comment; 0 Comments.