Rebecca Henderson
14 Results
- 11 Apr 2013
- Working Papers
Managers and Market Capitalism
In whose interests should managers act, particularly when structuring market regulations in highly technical or specialized matters that are largely outside public purview? This paper raises questions about the role of managers in sustaining the conditions for market capitalism to achieve its normative objectives. Rebecca Henderson and Karthik Ramanna begin with a discussion of the normative arguments for fully competitive markets as a resource allocation mechanism in complex societies. They suggest that Milton Friedman's assertion that the business of business is to increase its profits was in fact a moral assertion rooted in this normative framework. Next, they discuss the conditions for the existence of competitive markets and offer a brief overview of the institutions that provide them, noting that a combination of for-profit, pure public, and public-private institutions are needed to sustain capitalism. This perspective has two implications for managers. First, in many cases the opportunity to provide market completing institutions is a significant profit opportunity. Second, in those cases in which the provision of an institution is a scarcely attended political process or a public good that cannot be easily realized by managers, managers may have a duty to mitigate this market incompleteness even if it is not immediately profit maximizing to do so. Ultimately, managers' actions are likely to shape the moral and political legitimacy of market capitalism. Read More
- 22 Mar 2013
- Research & Ideas
Pulling Campbell’s Out of the Soup
- 14 Sep 2012
- Working Papers
What Do Managers Do? Exploring Persistent Performance Differences among Seemingly Similar Enterprises
Decades of research using a wide variety of detailed plant- and firm-level data has provided strong evidence of persistent performance differences among seemingly similar enterprises. But what causes these differences? In this paper, the chapter of a forthcoming book, Gibbons and Henderson focus on the role of "relational contracts" in sustaining persistent performance differences among seemingly similar enterprises. The paper provides evidence both that many important management practices rely on relational contracts, and that relational contracts can be hard to build and change. They explore a number of reasons that relational contracts may be difficult to build, exploring both "bad parameters" and "bad luck" and the difficulties inherent in communicating the full terms of an evolving contract. They suggest that this perspective opens up a rich field of research into the role that managers play in sustaining superior performance and explore a number of theoretical and empirical approaches that may prove fruitful in building further understanding. Read More
- 14 Feb 2012
- Working Papers
Relational Contracts and Organizational Capabilities
If capabilities are indeed a source of sustained competitive advantage, why don't they diffuse more rapidly? Capabilities diffuse slowly even when managers acknowledge that they are behind and are spending heavily to catch up, and where there appears to be industrywide agreement about best practice. This paper by R. Gibbons and R. Henderson suggests that the often slow diffusion of competitively significant capabilities is because many key managerial practices rely on relational contracts: an economist's term for collaboration sustained by the shadow of the future, as opposed to formal contracts enforced by courts. Building these relational contracts requires moving beyond task knowledge to the development of "relational knowledge." Relational knowledge may be substantially more difficult to develop than task knowledge both because there is much more of it and because its acquisition is complicated by incentive problems. Overall, while it is well established that organizations are replete with relational contracts, these informal understandings may be one of the reasons that competitively important practices are sometimes surprisingly slow to diffuse. Read More
- 18 Mar 2011
- Working Papers
Schumpeterian Competition and Diseconomies of Scope: Illustrations from the Histories of Microsoft and IBM
Firms dominant in one era are often less successful in new technological eras, despite being able to exploit economies of scope and other incumbent advantages. What leads to this Schumpeterian creative destruction? Researchers Timothy Bresnahan (Stanford), Shane Greenstein (Northwestern), and Rebecca Henderson (Harvard Business School) look to IBM and Microsoft for an answer. Read More
- 02 Nov 2010
- Working Papers
Making the Numbers? ‘Short Termism’ & the Puzzle of Only Occasional Disaster
Executives at public companies are always under pressure to "meet the numbers" each quarter, often so much so that they sacrifice long-term investments in order to make everything look rosy in the short term. In this paper, Harvard Business School professor Rebecca M. Henderson and Sloan School of Management professor Nelson P. Repenning set out to reconcile the apparently contradictory strategies of short-term results and long-term investments. Read More
- 09 Aug 2010
- Research & Ideas
How to Speed Up Energy Innovation
We know the grand challenge posed by shifting away from dirty energy sources. The good news, says Harvard Business School professor Rebecca Henderson, is that we have seen such change before in fields including agriculture and biotech, giving us a clearer pathway to what it will take. Read More
- 28 Apr 2010
- Research & Ideas
Earth Day Reflections
- 24 Feb 2010
- Working Papers
Accelerating Innovation In Energy: Insights from Multiple Sectors
How should the energy sector best respond to the threat of climate change? In this introductory chapter to a forthcoming book, Harvard Business School's Rebecca M. Henderson and Richard G. Newell of Duke University frame the discussion by highlighting the volume's contributions concerning four particularly innovative sectors of the U.S. economy: agriculture, chemicals, life sciences, and information technology. These four sectors have been extraordinarily important in driving recent economic growth. Henderson and Newell describe why accelerating innovation in energy could play an important role in shaping an effective response to climate change. Read More