- 08 Apr 2011
- Research & Ideas
Will the Japan Disaster Remake the Landscape for Green Energy in Asia?
Entrepreneurs at the recent Asia Business Conference at Harvard Business School said the disaster in Japan could accelerate the move toward "green" energy sources in Asia, opening opportunities. Closed for comment; 0 Comments.
- 08 Apr 2011
- Working Paper Summaries
Delay as Agenda Setting
A common business (and life) practice involves delaying a decision in order to avoid immediate commitment. James J. Anton (Fuqua School of Business) and Dennis A. Yao (HBS) discuss ways in which delaying or, alternatively, speeding up commitment can be a valuable tactic, how these tactics influence the actions of other decision makers, and ways in which such actions affect other decisions. Changing the speed at which a decision is made affects how others allocate resources to influence how that and other decisions will eventually be made. The researchers identify two tactics associated with changing decision speed: "pinning" and "focusing." Key concepts include: Commitment-avoiding can be a valuable tactic in that delaying a decision will greatly affect the actions of other decision makers-including both allies and rivals. Pinning involves taking actions that "pin" a rival decision maker's resources to one decision, thus reducing the rival's influence on other decisions. Focusing involves speeding up a decision, which frees up an ally's resources for use on other decisions. Closed for comment; 0 Comments.
- 07 Apr 2011
- What Do You Think?
When Should the Public Sector Take Over in a Meltdown?
Summing Up Jim Heskett's readers have wildly differing opinions as to what extent governments should step in to remedy public sector "meltdowns." Closed for comment; 0 Comments.
- 07 Apr 2011
- Working Paper Summaries
The Consequences of Financial Innovation: A Counterfactual Research Agenda
While financial innovation is often praised as a positive force for societal growth, it also takes much of the blame for the recent global financial crisis. In this paper, Harvard Business School professors Josh Lerner and Peter Tufano explore financial innovation and discuss how it differs from other types of innovation. Key concepts include: Financial innovation is defined as the act of creating and then popularizing new financial instruments, as well as new financial technologies, institutions, and markets. Economists initially tended to consider financial innovation in the same way that they consider manufacturing innovation. However, financial innovation differs from other types of new product development in several ways: predicting the social consequences of the innovation can be challenging, due to how interconnected the financial system is; the consequences of the innovation may change over time, due to the dynamic nature of the business; and new financial products and services are especially susceptible to regulation. The researchers suggest several promising approaches for future research. These include using counterfactual "thought experiments" to explore systemic impacts; looking at settings where there are big constraints on financial innovation, such as sharia-compliant financial structures; using experimental techniques; and studying the social impact of financial innovation using the same tools used to analyze the impact of new products. Closed for comment; 0 Comments.
- 06 Apr 2011
- Working Paper Summaries
Do Not Trash the Incentive! Monetary Incentives and Waste Sorting
Many cities encourage residents to sort their domestic trash into separate bins, for the sake of recycling some of it and thus reducing the amount of garbage that ends up in landfills. The problem is that sorting waste is not a fun activity, and not everyone is willing to do it. Using data from 95 municipalities in Italy, this paper discusses whether and how monetary incentives can encourage people to sort their trash. Research was conducted by Alessandro Bucciol of the University of Verona and the University of Amsterdam, Natalia Montinari of the University of Padua and the Max Planck Institute of Economics, and Marco Piovesan of Harvard Business School. Key concepts include: The paper discusses the pay-as-you-throw (PAYT) system, in which residents pay lower fees if they sort their trash than if they don't. The researchers found that the introduction of a PAYT system had a significant and positive net effect of 12.2 percent on the amount of trash that residents sort. This compares with a positive effect of 18.1 percent for the nonmonetary incentive of letting residents leave sorted bins outside their doors, rather than requiring them to carry their trash to drop-off bins on the street. Thus, the PAYT system is more of a complement than a substitute for the door-to-door collection system. However, the PAYT system does not affect the actual amount of waste each household creates. While the system induces residents to sort their trash, it does not induce them to produce less of it. Closed for comment; 0 Comments.
- 05 Apr 2011
- First Look
First Look: April 5
When less choice is better … Lending to peers … Behind a Chinese construction firm's US success. Closed for comment; 0 Comments.
- 05 Apr 2011
- Working Paper Summaries
The Power of Political Voice: Women’s Political Representation and Crime in India
Protecting the rights of disadvantaged citizens remains a challenge in both developing and developed countries. These individuals often are targets of verbal abuse, discrimination, and violent crime. Using evidence from India, this paper shows that political representation of disadvantaged groups is an important means of giving them a voice in the criminal justice system. Research was conducted by Lakshmi Iyer of Harvard Business School, Anandi Mani of the University of Warwick, and Prachi Mishra and Petia Topalova of the International Monetary Fund. Key concepts include: An Indian law enacted in 1993 mandated that at least one-third of council seats at the village, intermediate, or district level must be filled by women. The rise in female representation led to a rise in the number of reported crimes against women. The researchers take these statistics as positive news for women's empowerment. They provide supporting evidence that this is an indication of women now being more likely to report when they are attacked, rather than an increase in the actual incidence of crime. Female political representation at the local level also induces law enforcement officials to be more responsive to crimes against women. The researchers found similar results in the case of crimes against Scheduled Castes (SC)-the so-called untouchables that have historically been at the bottom of the Hindu caste system. An increase in SC political representation led to an increase of documented crimes against SCs. Closed for comment; 0 Comments.
- 04 Apr 2011
- Research & Ideas
Attention Medical Shoppers: What Health Care Can Learn from Walmart and Amazon
At a Harvard Business School panel discussion on health care management, experts looked to the retail industry as a possible model for delivering medical services more effectively. Open for comment; 0 Comments.
- 04 Apr 2011
- HBS Case
Reinventing the National Geographic Society
How do you transform a 123-year-old cultural icon and prepare it for the digital world? Slowly, as a new case on the "National Geographic Society" by David Garvin demonstrates. Open for comment; 0 Comments.
- 01 Apr 2011
- Working Paper Summaries
When Power Makes Others Speechless: The Negative Impact of Leader Power on Team Performance
History has shown that possessing a great deal of power does not necessarily make someone a good leader. This paper explores the idea that power actually has a detrimental effect on leadership, especially with regard to how it affects open communication within a team. Research was conducted by Leigh Plunkett Tost of the University of Washington, Francesca Gino of Harvard Business School, and Richard P. Larrick of Duke University. Key concepts include: Members of teams with high-power leaders are likely to keep quiet in meetings, both because high-power leaders talk a lot, meaning there's not much time for others to talk, and because of the perception—fair or not—that powerful people aren't interested in anyone else's ideas. This can result in a dearth of ideas during brainstorming sessions. Leader power has a negative effect on team members' perceptions of the leader's ability and desire to engage in open communication. Because open communication is vital to any project, these perceptions can hurt team performance. These negative effects of leader power can be virtually eliminated simply by clearly communicating the idea that every team member is individually instrumental to any given task at hand. Closed for comment; 0 Comments.
- 31 Mar 2011
- Research & Ideas
From SpinPop to SpinBrush: Entrepreneurial Lessons from John Osher
At a panel discussion on entrepreneurship, professor William A. Sahlman and several successful start-up veterans discussed the case of John Osher, father of Dr. John's Products, Ltd., and the wildly popular battery-powered toothbrush, the SpinBrush. Key concepts include: Look for gaps in the existing market or product lines to exploit. Anticipate product knockoffs and plan accordingly. Raise money when you don't need it, so you'll have it when you do. Be quick to market with the initial product and improve as you go along. Closed for comment; 0 Comments.
- 31 Mar 2011
- Working Paper Summaries
What Do CEOs Do?
If time is money, as the old adage goes, then a CEO's schedule is especially important to a firm's financial success. This raises a fair question: What do CEOs do all day? To that end, researchers followed the activities of 94 CEOs in Italy over the course of a pre-specified week, enlisting the CEOs' personal assistants to track their bosses' activities with time-use diaries. Research was conducted by Raffaella Sadun of Harvard Business School, Luigi Guiso of the European University Institute, and Oriana Bandiera and Andrea Prat of the London School of Economics. Key concepts include: Compared with CEOs who work shorter hours overall, CEOs with longer workdays tend to devote more time meeting with other employees within the company and less time meeting with outsiders. The better the firm's governance structure, the more likely it is that a CEO will spend more time meeting with insiders than outsiders. The findings show a strong correlation between hours worked and productivity—a 2.14 percentage point increase in productivity for every one percentage point increase in hours worked. That positive correlation is driven entirely by the time a CEO spends with company insiders. Time spent with insiders is correlated with profits; time spent with outsiders is not. A possible interpretation is that spending time with outsiders might be more beneficial to the CEO than to the firm. Closed for comment; 0 Comments.
- 30 Mar 2011
- Working Paper Summaries
Temptation at Work
Among the many distractions that keep office employees from their work, surfing the web is arguably the most irresistible time-waster of all. In order to deal with that problem, many companies either prohibit Internet use during working hours, or closely monitor employees' web activity. This means workers must wait until they get home to get their daily YouTube fix. But does forbidding this distraction actually increase productivity? In this paper, researchers find that the answer is no—and that delaying gratification actually has a negative impact on employee performance. Research was conducted by Alessandro Bucciol of the University of Verona and the University of Amsterdam, Daniel Houser of George Mason University, and Marco Piovesan, a research fellow at Harvard Business School. Key concepts include: Experimental research finds that subjects who were told to resist the temptation of watching a funny video made significantly more mistakes on a subsequent task than subjects who were allowed to watch the video right away. The findings suggest that employers should not tell employees not to surf the web in situations where the web is technically available to them. Rather, these companies should either remove web access entirely or, when this is not practical, allow a certain amount of time for personal Internet activity. Employers might also consider allowing regular Internet breaks, in the same way that they offer coffee and cigarette breaks. Closed for comment; 0 Comments.
- 29 Mar 2011
- Working Paper Summaries
Risky Trust: How Multi-entity Teams Develop Trust in a High Risk Endeavor
Work that comes with high risk requires a great deal of trust among the individuals involved, whether it's the financial risk of producing a high-budget film or the personal safety risk of working in a war zone. In this paper, reporting on case study research on a high-risk, multimillion-dollar construction project, HBS doctoral candidate Faaiza Rashid and professor Amy C. Edmondson explore the concept of "risky trust," and examine how colleagues can learn to trust each other in the midst of high-risk work situations. Key concepts include: Trusting the intentions and competence of other team members always matters, but in risky situations it's especially vital that workers can also trust the procedures of a team project. Teams can repair damaged trust not only through process innovations, but also by overcoming social barriers to trust. Leadership is a vital activity that can come from multiple individuals in a high-risk project, to facilitate and build understanding. This requires a focus on initial discourse among the team, as well as communicating the importance of trust to the project. Trust at an interpersonal level does not automatically translate to trust at the interorganizational level. Closed for comment; 0 Comments.
- 29 Mar 2011
- First Look
First Look: March 29
Accounting for iPhones … A light on the future … Opening the black box of innovation. Closed for comment; 0 Comments.
- 28 Mar 2011
- Research & Ideas
Why Manufacturing Matters
After decades of outsourcing, America's ability to innovate and create high-tech products essential for future prosperity is on the decline, argue professors Gary Pisano and Willy Shih. Is it too late to get it back? From HBS Alumni Bulletin. Closed for comment; 0 Comments.
- 25 Mar 2011
- Working Paper Summaries
How Do Incumbents Fare in the Face of Increased Service Competition?
Companies that compete by offering a high level of service are particularly vulnerable to lose customers—even longtime customers—when competitive entrants offer increased service levels, according to new research in the retail banking industry by Ryan W. Buell, Dennis Campbell, and Frances X. Frei, all of Harvard Business School. The good news for providers of high-touch service is that if they can sustain the service advantage over time, they could be rewarded with higher value customers. Key concepts include: Incumbents offering high quality service attract and retain customers who are disproportionately service sensitive and systematically vulnerable to competitors offering superior service. It is the high quality incumbent's most valuable customers—those with the longest tenure, most products, and highest balances—who are the most vulnerable to superior service alternatives. Conversely, when the incumbent fails to maintain a high service position within the market, its customers are vulnerable to competitors offering inferior service but lower prices. Firms that make the strategic decision not to compete on service may not need to be concerned about the entry or expansion of competitors offering superior service. A long-run implication is that incumbents that can sustain a high level of service relative to local competitors will be able to attract and retain higher value customers over time. Closed for comment; 0 Comments.
- 24 Mar 2011
- Working Paper Summaries
Individual Rationality and Participation in Large Scale, Multi-Hospital Kidney Exchanges
As kidney exchange moves from local networks to a national level, a new set of problems arises. One central issue, for example, is how individual hospitals can be motivated to participate. This paper by Itai Ashlagi (Sloan School of Management, MIT) and Alvin E. Roth (Harvard Business School) provides a theoretical framework to study and overcome the kinds of problems that can be anticipated. Key concepts include: The paper addresses the growing problem of providing hospitals with incentives to participate fully in a national kidney exchange, in order to achieve the gains that exchange on a large scale makes possible. Hospitals might be reluctant to enter a national exchange if it means they would have to give up kidneys to other institutions that could be used in their own patients. In large markets it is possible to redesign the matching mechanisms to guarantee individually rational allocations to hospitals at very modest cost in terms of "lost transplants." If care is taken in how kidney exchange mechanisms are organized, the problems of participation may be less troubling in large exchange programs than they are starting to be in multi-hospital exchanges as presently organized. Closed for comment; 0 Comments.
- 23 Mar 2011
- Working Paper Summaries
Do US Market Interactions Affect CEO Pay? Evidence from UK Companies
CEOs of UK firms receive higher total compensation if their companies have interactions with US product, capital, and labor markets. Moreover, the compensation package is often adopted from American-style arrangements, such as the use of incentive-based pay. Researchers Joseph J. Gerakos (University of Chicago), Joseph D. Piotroski (Stanford), and Suraj Srinivasan (Harvard Business School) analyzed data on the compensation practices of 416 publicly traded UK firms over the period 2002 to 2007. Key concepts include: The reason to compare similarity with the level and style of US pay is because CEOs of US companies typically are among the highest paid in the world. The UK firms' interactions with US markets were measured on four variables: the relative importance of US sales to the firm, the level of prior US acquisition activity, the presence of a US exchange listing, and the US board experience of the firm's directors. All four US market interaction variables correlated with greater pay, but only US operational activities (sales and acquisitions) were associated with pay similar to US-style contracts. The increased compensation alleviates internal and external pay disparities arising from the presence of US operations and businesses, and compensates CEOs for bearing the additional risk and responsibility associated with exposure to foreign securities laws and legal environments. Closed for comment; 0 Comments.
Teaching a ‘Lean Startup’ Strategy
Most startups fail because they waste too much time and money building the wrong product before realizing what the right product should have been, says HBS entrepreneurial management professor Thomas R. Eisenmann. Closed for comment; 0 Comments.