First Look

First Look summarizes new working papers, case studies, and publications produced by Harvard Business School faculty. Readers receive early knowledge of cutting-edge ideas before they enter the mainstream of business practice. For complete details on faculty research, see our Working Papers section.

March 26, 2008

When retail sales drop, management's first impulse is to trim payroll. A better strategy: do the opposite and buttress payroll to keep the stores' operations running smoothly, says HBS professor Zeynep Ton. Describing her new research in the March issue of Harvard Business Review, Ton writes, "I discovered that staffing levels tend to have the most pronounced effect on tasks that don't count for much in managers' evaluations."

The bottom line: increasing the staffing levels helped retail stores in two ways—goods got transferred faster from the stockroom to the selling area, and unpopular or obsolete products were shifted more quickly from the retail space back to the distribution center.

This week also sees two working papers for download; a heads-up for a new book on the relationship between capitalism and democracy; and cases including a look at Kazuo Inamori. A trailblazing entrepreneur of late 20th century Japan, Inamori founded a multinational and a telecommunications network, and became an ardent benefactor of the Kyoto Prizes for achievements in advanced technology, basic sciences, and arts and philosophy.

 

Working Papers

Diffusing Management Practices within the Firm: The Role of Information Provision

Abstract

A key role of corporate managers is to encourage subsidiaries to adopt innovative practices. This paper examines the conditions under which corporate managers use information provision to encourage subsidiaries' adoption of advanced management practices. Focusing on the distribution of expertise across subsidiaries, we propose that corporate managers elect an information provision strategy when (i) subsidiaries, on average, possess moderate levels of related expertise; (ii) subsidiaries exhibit significant heterogeneity in this expertise; and (iii) the subsidiaries are more diversified and less concentrated. We examine the efforts to diffuse pollution prevent practices exhibited by manufacturing firms in the information and communication technology sector in the United States, and find empirical support for the four hypotheses developed here. The research presented in this paper has implications for our understanding not only of who adopts advanced environmental management practices, but more broadly, of when firms adopt information provision strategies to encourage knowledge transfer within the organization.

Download the paper: http://www.hbs.edu/research/pdf/08-085.pdf

Board of Directors' Responsiveness to Shareholders: Evidence from Shareholder Proposals

Abstract

Using a sample of 620 non-binding, majority-vote (MV) shareholder proposals between 1997 and 2004, we analyze the frequency, determinants and consequences of boards' implementation decisions. The frequency of implementation has almost doubled after 2002, reaching more than 40%. Shareholder pressure (e.g., the voting outcome and the influence of the proponent) and the type of proposals are the main determinants of the implementation decision, while traditional governance indicators do not seem to matter. Outside directors implementing MV shareholder proposals experience a one-fifth reduction in the likelihood of losing their board seat and in the likelihood of losing other directorships.

Download the paper: http://www.hbs.edu/research/pdf/08-048.pdf

 

Cases & Course Materials

Dasher Company

Harvard Business School Case 608-113

No abstract is available at this time.

Purchase this case:
http://www.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=608113

Kazuo Inamori, A Japanese Entrepreneur

Harvard Business School Case 408-039

The case provides insight into a business leader whose cognizance of contextual forces (social, economic, and political) allowed him to drive significant change in an industry and Japanese society in the second half of the twentieth century.

Purchase this case:
http://www.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=408039

Leadership in Energy: Jim Rogers at Cinergy

Harvard Business School Case 408-097

Jim Rogers, CEO of the energy company Cinergy, has led the company from the brink of bankruptcy to one of the premier energy companies through selecting a focused strategy, aligning the organization to support it, and mobilizing all the employees to implementation. The case also discusses the strategies used by Rogers to communicate the strategy, which included innovative image maps.

Purchase this case:
http://www.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=408097

Leadership in Energy: Jim Rogers at Cinergy

Harvard Business School Case 408-097

Jim Rogers, CEO of the energy company Cinergy, has led the company from the brink of bankruptcy to one of the premier energy companies through selecting a focused strategy, aligning the organization to support it, and mobilizing all the employees to implementation. The case also discusses the strategies used by Rogers to communicate the strategy, which included innovative image maps.

Purchase this case:
http://www.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=408097

Linear Air: Creating the Air Taxi Industry

Harvard Business School Case 808-107

No abstract is available at this time.

Purchase this case:
http://www.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=808107

Parks Capital-Investment in US Retail, Inc.

Harvard Business School Case 208-104

Parks Capital acquired a Children's Apparel Manufacturer, American Child Clothing Manufacturers, Inc. (ACCM), in 2001. Two years later ACCM's largest retail customer, U.S. Retail, Inc., decided to evaluate strategic alternatives due to financial difficulties. Parks Capital must now decide whether to acquire U.S. Retail, to fund ACCM so it acquires U.S. Retail, or to sit on the sidelines.

Purchase this case:
http://www.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=208104

Queensland Sugar Limited

Harvard Business School Case 508-038

Until industry deregulation in 2006, Queensland Sugar ran Australia's single-desk marketing system for raw sugar exports. Since deregulation, eight of the ten Queensland sugar millers have elected to continue collective marketing through QSL. However, several millers are threatening to leave the group and market on their own. Their primary objection is to QSL's board structure, which is currently divided equally between millers, growers, and independent directors. The case describes the evolution of Australia's sugar industry; the differing interests of growers, millers, and customers; and the impact of changes in global supply (e.g., the rise of Brazil as a major sugarcane and sugar producer) and demand (e.g., the increased use of sugarcane for ethanol production).

Purchase this case:
http://www.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=508038

Ruling the Modern Corporation: The Debate over Limited Liability in Massachusetts

Harvard Business School Case 708-016

In 1830, Governor Levi Lincoln, Jr. urged the Massachusetts state legislature to introduce a limited liability regime for manufacturing corporations similar to that adopted in neighboring states. At least since 1809, shareholders in the state's manufacturing corporations had faced unlimited liability, which held shareholders personally liable for corporate debts. While unlimited liability was meant to ensure financial prudence, Lincoln and others worried that this policy was doing more harm than good and driving capital from the state. With the governor pushing for action, it was up to the state legislature to decide how to proceed.

Purchase this case:
http://www.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=708016

SPECIALISTERNE: Sense & Details

Harvard Business School Case 608-109

Three-quarters of Specialisterne's expert software testing staff are diagnosed with some form of Autistic Spectrum Disorder (ASD). Usually a handicap, ASD conveys talents especially suited to software testing and other highly repetitive tasks that require very high accuracy. This case describes a growing company struggling with unique challenges as it implements a "social enterprise" business model; it describes the difficulties faced by social entrepreneurs implementing for-profit business models in domains usually populated by non-profits. The case is also useful as an introduction to the business of software testing.

Purchase this case:
http://www.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=608109

 

Publications

Our Communities, Our Homes: Pathways to Housing and Homeownership in America's Cities and States

Abstract

In Our Communities, Our Homes: Pathways to Housing and Homeownership in America's Cities and States, the authors put political views aside to address the impediments to housing and homeownership at the state and local levels. This volume is a compilation of bipartisan recommendations from the authors and success stories from all corners of the country.

Book link:
http://www.jchs.harvard.edu/

Capitalism, Democracy and Development

Abstract

This book looks at the emergence of capitalism and democracy as systems of economic and political governance and considers how these two systems may be both mutually supportive and antagonistic. In mapping out the balance between capitalism and democracy, the book includes chapters on the theory and history of these systems that challenge the assumption that their spread will bring about a convergence of incomes either among countries or within them. Inequalities of income and power emerge as a major societal issue alongside poverty, and the book develops alternative societal models based upon the degree of inequality in wealth and power. Since 1980, Anglo-American style capitalism has been a cause of increased inequality in a number of rich countries and threatens to duplicate itself in many developing countries. The book argues that the increasing integration of markets (globalization) will not solve these problems of inequality, they require political solutions. The EU attempts one such solution, but it is not clear whether it will remain competitively viable. Meanwhile, increasing inequality is causing two serious problems for democratic societies: a move to the left and/or political instability in many developing countries and a rising tide of immigrants seeking to move from poor countries to rich.

The Hidden Risk in Cutting Retail Payroll

Abstract

When retailers' sales slip, the biggest opportunity to boost profits comes from improving execution. To do that, research shows, managers may actually need to increase staff.