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.

October 14

Given the increasing sophistication of technology and the inability of small online advertisers to see what is happening "beneath the hood," these advertisers often have trouble understanding exactly what they are paying for. The result: They are easy prey for powerful ad consortiums with a vested interest in keeping things vague. With the article "Who Owns Metrics? Building a Bill of Rights for Online Advertisers," professor Benjamin G. Edelman argues for greater transparency and offers five rights for advertisers to protect themselves from shady practices. These rights include:

  1. An advertiser's right to know where its ads are shown.
  2. An advertiser's right to meaningful, itemized billing.
  3. An advertiser's right to use its data as it sees fit.
  4. An advertiser's right to enjoy the fruits of its advertising campaigns.
  5. An advertiser's right to resolve disputes fairly and transparently.

"In this time of plummeting ad prices, networks are increasingly anxious to attract advertisers. With increased negotiating power, advertisers can and should demand more," Edelman observes. More on his blog.

 

Working Papers

Capitalizing On Innovation: The Case of Japan (revised October 2009)

Abstract

Japan's industrial landscape is characterized by hierarchical forms of industry organization, which are increasingly inadequate in modern sectors, where innovation relies on platforms and horizontal ecosystems of firms producing complementary products. Using three case studies—software, animation and mobile telephony—we illustrate two key sources of inefficiencies that this mismatch can create, all the while recognizing that hierarchical ecosystems have played a major role in Japan's success in manufacturing-driven industries (e.g., Toyota in automobiles and Nintendo with videogames). First, hierarchical industry organizations can "lock out" certain types of innovation indefinitely by perpetuating established business practices. For example, the strong hardware and manufacturing bias and hierarchical structures of Japan's computer and electronics firms is largely responsible for the virtual non-existence of a standalone software sector. Second, even when the vertical hierarchies produce highly innovative sectors in the domestic market, the exclusively domestic orientation of the "hierarchical industry leaders" can entail large missed opportunities for other members of the ecosystem, who are unable to fully exploit their potential in global markets. For example, Japan's advanced mobile telecommunications systems (services as well as handsets) suffer from a "Galapagos effect": like the unique fauna of these remote islands they are only found in the Japanese archipelago. Similarly, while Japanese anime is renowned worldwide for its creativity, there is no global Japanese anime content producer comparable to Disney or Pixar. Instead, anime producers are locked into a highly fragmented domestic market, dominated by content distributors (TV stations and DVD companies) and advertising agencies. We argue that Japan has to adopt legislation in several areas in order to address these inefficiencies and capitalize on its innovation: strengthening antitrust and intellectual property rights enforcement; improving the legal infrastructure (e.g., producing more corporate lawyers); lowering barriers to entry for foreign investment; and facilitating the development of the venture capital sector.

Download the paper: http://www.hbs.edu/research/pdf/09-114.pdf

Endowments, Fiscal Federalism, and the Cost of Capital for States: Evidence from Brazil, 1891-1930

Abstract

There is a large amount of literature that aims to explain what determines country risk (defined as the difference between the yield of a sovereign's bonds and the risk-free rate). In this paper, we contribute to the discussion by arguing that an important explanatory factor is the impact that commodities have on the capacity to pay. We use a newly created database with state-level fiscal and risk premium data for Brazil states between 1891 and 1930 to show that Brazilian states with natural endowments that were allowed to export commodities high in demand (e.g., rubber and coffee) ended up having higher revenues per capita and, thus, lower cost of capital. We also explain that the variation in revenues per capita was both a product of the variation in natural endowments (i.e., the fact that states cannot produce any commodity they want) and a commodity boom that had asymmetric effects among states. These two effects generated variation in revenues per capita at the state level thanks to the extreme form of fiscal decentralization that the Brazilian government adopted in the Constitution of 1891, which gave states the sole right to tax exports. We end by running instrumental variable estimates using indices of export prices for each state to instrument for revenues per capita. Our instrumental variable estimates confirm our results that states with commodities that had higher price increases had lower risk premia.

Download the paper: http://www.hbs.edu/research/pdf/10-027.pdf

 

Publications

Who Owns Metrics? Building a Bill of Rights for Online Advertisers

Abstract

I offer five rights to protect advertisers from increasingly powerful ad networks—avoiding fraudulent charges for services not rendered, guaranteeing data portability so advertisers get the best possible value, and assuring price transparency so advertisers know what they're buying. I explain the need for these rights by presenting specific practices causing particular concern.

The Decline and Renewal of British Multinational Banking

Abstract

This chapter discusses the renaissance of British multinational banking from the 1990s. British commercial banks had pioneered multinational banking during the 19th century, but they were unable to build on this legacy during the new wave of global banking that began in the 1960s with the advent of the Euromarkets. However, from the 1990s there was major restructuring and a much improved performance. The chapter explores the shifts in strategy and management that enabled HSBC and other British banks to become global leaders in contemporary multinational banking, at least until the global financial crisis, which began in 2007, raised fundamental questions about the future trajectory of the entire global financial system.

Book link: http://www.oxfordscholarship.com/oso/public/content/management/9780199226009/toc.html

 

Cases & Course Materials

CapitaLand Ltd: CEO Selection

Harvard Business School Case 410-055

In September 2007, the Group President of CapitaLand has to select a new CEO for a key subsidiary. The case presents the profiles of three candidates—two internal and one external—and ends with the senior management team debating the candidates' merits.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/410055-PDF-ENG

Consumer Lending in Japan: Citi CFJ (B)

Harvard Business School Supplement 710-018

As the regulatory environment for consumer lending evolves, CFJ has to decide how to respond.

Purchase this supplement:
http://cb.hbsp.harvard.edu/cb/product/710018-PDF-ENG

The London 2012 Olympic Games

Harvard Business School Case 510-039

It's 2009 and Paul Williamson, Head of Ticketing, must finalize ticket prices for the 2012 London Olympic Games. Yet, there are many criteria to consider. First, given the importance of ticketing to the Games' bottom line, he has a strong incentive to maximize revenues. Second, because the entire world will be watching, he wants to maximize attendance—not just at the Opening Ceremony and swimming finals, which are easy sells, but also at events such as handball and table tennis, which are not. Third, he wants to fill seats with the right people—knowledgeable fans who add to the energy and atmosphere of the event. Finally, tickets have to be accessible not only to the world's elite but also to average Londoners, many of whom live around the corner from the Olympic Park.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/510039-PDF-ENG

Procter & Gamble in the 21st Century (A): Becoming Truly Global

Harvard Business School Case 309-030

Since the 1980s, Procter & Gamble had leveraged its purpose, values, and principles (PVP) to create a global company. When P&G faced difficult times in 2000, the new CEO, A.G. Lafley, leveraged the PVP to drive P&G's turnaround, integrate global operations, and guide decision making in all facets of the business. But the Gillette acquisition posed a new challenge.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/309030-PDF-ENG

Procter & Gamble in the 21st Century (B): Welcoming Gillette

Harvard Business School Supplement 309-031

A.G. Lafley and P&G leaders decided to approach the Gillette integration differently from previous mergers. Using P&G's purpose, values, and principles (PVP) it treated the acquisition as a merger that sought to take the "best of both" from each company. In the integration's first phase, prior to the change of control, the strategy achieved successes while creating some unexpected challenges. How should the integration leaders address these challenges moving forward?

Purchase this supplement:
http://cb.hbsp.harvard.edu/cb/product/309031-PDF-ENG

Procter & Gamble in the 21st Century (C): Integrating Gillette

Harvard Business School Supplement 309-032

P&G had used its purpose, values, and principles (PVP) to prepare for the physical integration of Gillette prior to the change of control. The execution of these plans posed numerous challenges in global business units as well as in individual country organizations. While managers sought to maintain business momentum during the transition, corporate leaders were intent on continuing to use Gillette as a catalyst of change.

Purchase this supplement:
http://cb.hbsp.harvard.edu/cb/product/309032-PDF-ENG