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.

June 26

Explaining limited career mobility for women and minorities

Even as more women and racial minorities are being hired by professional service firms, they continue to be underrepresented in the upper echelons of management. Here's the good news: Recent research by Kathleen McGinn and Katherine Milkman shows that having superiors of the same gender or race enhances the promotions of junior professionals. On the flip side, a junior professional who has a higher proportion of peers (i.e., potential competitors) of the same sex or race is more likely to leave the firm or not be promoted. "This research highlights how important it is to look at both cooperative and competitive effects of demographic similarity when trying to address the problem of persistent underrepresentation of women and minorities at the highest levels in organizations," McGinn and Milkman write in their paper, Looking Up and Looking Out: Career Mobility Effects of Demographic Similarity Among Professionals.

How tax rates affect capital allocation

The effects of corporate income taxes on trade credit practices are little understood. In Trade Credit and Taxes, Mihir A. Desai, C. Fritz Foley, and James R. Hines, Jr. develop the idea that trade credit allows firms to reallocate capital in response to tax differences. The findings demonstrate that tax rate differences across countries significantly affect capital allocation within firms, depressing investment levels in high tax jurisdictions and introducing differences between the productivity of capital deployed in different locations.

Transforming Verizon

In a new case study, Professor Rosabeth Moss Kanter and Matthew Bird explore Verizon's massive, multiyear shift from traditional telecommunications provider to a global services and technology giant, with additional work ahead. Is Verizon's culture ready for more change? Read "Transforming Verizon: A Platform for Change."

 

Publications

Banks as Multinationals

Abstract

This is a revised edition of a comparative, international study which looks at the history of multinational banks. Researchers from the United States, Japan, Europe, and Australia survey the evolution of multinational banks over time and suggest a conceptual framework in which this development can be understood. In-depth analyses of the multinational banking strategies of selected countries and institutions extend from the early nineteenth century to the present day. The approach is interdisciplinary, with economists and business historians joining together to confront theory with empirical evidence.

Publisher's Link: http://www.routledge.com/books/details/9780415532716/

 

Working Papers

No Margin, No Mission? A Field Experiment on Incentives for Pro-Social Tasks

Abstract

A substantial body of research investigates the design of incentives in firms, yet less is known about incentives in organizations that hire individuals to perform tasks with positive social spillovers. We conduct a field experiment in which agents hired by a public health organization are randomly allocated to four groups. Agents in the control group receive a standard volunteer contract often offered for this type of task, whereas agents in the three treatment groups receive small financial rewards, large financial rewards, and non-financial rewards, respectively. The analysis yields three main findings. First, non-financial rewards are more effective at eliciting effort than either financial rewards or the volunteer contract. The effect of financial rewards is much smaller and not significantly different from zero except for the poorest agents, for whom the relative value of the reward is higher. Second, contrary to existing laboratory evidence, financial incentives do not appear to crowd out intrinsic motivation in this setting. Third, non-financial rewards elicit effort both by leveraging intrinsic motivation for the cause and by facilitating social comparison among agents. Overall, the findings demonstrate the power of non-financial rewards to motivate agents in settings where there are limits to the use of financial incentives.

Download the paper: http://www.hbs.edu/research/pdf/12-008.pdf

Trade Credit and Taxes

Abstract

This paper analyzes the extent to which firms use trade credit to reallocate capital in response to tax incentives. Tax-induced differences in pretax returns encourage the use of trade credit to reallocate capital from firms facing low tax rates to those facing high tax rates. Evidence from the worldwide operations of U.S. multinational firms indicates that affiliates in low-tax jurisdictions use trade credit to lend, whereas those in high-tax jurisdictions use trade credit to borrow: 10% lower local tax rates are associated with net trade credit positions that are 1.4% higher as a fraction of sales. The use of trade credit to get capital out of low-tax, low-return environments is also illustrated by reactions of U.S. firms to the temporary repatriation tax holiday in 2005, when affiliates with positive net trade credit positions were significantly more likely than others to repatriate dividends to parent companies in the United States.

Download the paper: http://papers.nber.org/papers/w18107

How Do Risk Managers Become Influential? A Field Study of Toolmaking and Expertise in Two Financial Institutions

Abstract

In this study, we examine transformations in the influence of risk managers in two large UK banks over a period of six years. Our analysis highlights that a process we term toolmaking, whereby experts create, articulate, and shape tools that embody their expertise, is central to the way in which the risk managers in our study garner influence in their organizations. Based on our field study, we identify two dimensions that help to explain experts' organizational influence: their ability to (a) incorporate their expertise into highly communicable tools and (b) develop a personal involvement in the deployment and interpretation of those tools in important decision-making forums. Based on experts' ability to combine and balance these two processes, we distinguish analytically among four positions of influence they can occupy-compliance expert, technical champion, trusted advisor, and engaged toolmaker-and trace the movements of experts between these positions. Our empirical findings and theoretical framework contribute to our understanding of the nature of expert influence and how and why functional groups, such as risk managers, can become influential.

Download the paper: http://www.hbs.edu/research/pdf/11-068.pdf

Looking Up and Looking Out: Career Mobility Effects of Demographic Similarity among Professionals

Abstract

We investigate the role of workgroup sex and race composition on the career mobility of professionals in "up-or-out" organizations. We develop a nuanced perspective on the potential career mobility effects of workgroup demography by integrating the social identification processes of cohesion, competition, and comparison. Using five years of personnel data from a large law firm, we examine the influence of demographic match with workgroup superiors and workgroup peers on attorneys' likelihood of turnover and promotion. Survival analyses reveal that higher proportions of same-sex and same-race superiors enhance junior professionals' career mobility. On the flip side, we observe mobility costs accruing to professionals in workgroups with higher proportions of same-sex and same-race peers. Qualitative data offer insights into the social identification processes underlying demographic similarity effects on turnover and promotion in professional service organizations.

Download the paper: http://www.hbs.edu/research/pdf/12-110.pdf

Communicating Frames in Negotiations

Abstract

An abstract is unavailable at this time.

Download the paper: http://www.hbs.edu/research/pdf/12-109.pdf

 

Cases & Course Materials

Cancer Treatment Centers of America®: Scaling the Mother Standard® of Care

Rosabeth Moss Kanter and Matthew Bird
Harvard Business School Case 312-073

The CEO of a private and growing national network of specialty care hospitals focusing on advanced-stage and complex cancer treatments reflected on the firm's past phase of growth before meeting with the company's Chairman and founder to discuss how to further scale what they called the Mother Standard of Care and, in the process, change the face of cancer care.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/312073-PDF-ENG

Pierre Frankel in Moscow (A): Unfreezing Change

Rosabeth Moss Kanter and Matthew Bird
Harvard Business School Case 312-070

A young and upcoming French executive in a global technology company is sent to Moscow as deputy managing director to turn around the Russia subsidiary. He must report to the subsidiary's managing director (a large reason for the organization's underperformance) and to corporate. In his first three months, he had taken steps to prepare the organization for change. Yet the lack of more tangible actions and results left him open to criticism from subsidiary employees and pressure from corporate executives. How could the young executive unfreeze the situation and get movement?

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/312070-PDF-ENG

Pierre Frankel in Moscow (B): Plowing Ahead

Rosabeth Moss Kanter and Matthew Bird
Harvard Business School Supplement 312-071

After several months into his turnaround of a global technology company's Russia subsidiary, a young and upcoming French executive reflected on how to institutionalize the subsidiary's transformation by further driving cultural change and breaking down internal silos. He realized that to complete the change he may need to continue into a second year. Yet the physical separation from his family had begun to take a toll. Had the executive done enough to institutionalize change or was it still too dependent on his personal relationships and the ability to build an internal coalition and exchange favors?

Purchase this supplement:
http://cb.hbsp.harvard.edu/cb/product/312071-PDF-ENG

Pierre Frankel in Moscow (C): Results

Rosabeth Moss Kanter and Matthew Bird
Harvard Business School Supplement 312-072

After 18 months as the deputy managing director of a global technology company's Russia subsidiary, a young and upcoming French executive prepared to hand over leadership. The executive reflected on what he had achieved and how as he considered next steps. He wanted to return to his native France, but the company requested that he go turn around another emerging market subsidiary. Should he go to India, ask for another assignment, or look at other opportunities outside the company?

Purchase this supplement:
http://cb.hbsp.harvard.edu/cb/product/312072-PDF-ENG

Transforming Verizon: A Platform for Change

Rosabeth Moss Kanter and Matthew Bird
Harvard Business School Case 312-082

A new CEO steps into the shoes of his long-time predecessor who had created the U.S. telecommunications giant via a series of acquisitions and, before departing, had initiated the company's strategic repositioning. The new CEO reflected on Verizon's recent successes, some of which he led, and considered how to ensure the team would continue to rise to new challenges. He knew change was both energizing and difficult, and that every victory had to be followed by the next play. He paused in his New York City office to think about how his team had handled recent challenges and whether the culture was in place to continue Verizon's transformation from a traditional telecommunications provider to a global services and technology firm.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/312082-PDF-ENG