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.

February 14

Hypocritical behavior

The phenomenon of practicing the very same conduct that we criticize in others is so common that it has its own idiom: the pot calling the kettle black. In a recent series of studies, Francesca Gino and several colleagues explore the factors that lead to this hypocritical behavior. They discuss their research in "The Pot Calling the Kettle Black: Contract Response to Ethical Dissonance" appearing in a forthcoming issue of Journal of Expermental Psychology.

Strategy shift at PepsiCo

In October 2010, PepsiCo formed its Global Nutrition Group, aiming to accelerate development in the areas of fruits, vegetables, whole grains, and other good-for-you foods. A new case study explores the reasons behind the decision and the complexities of bringing the group to fruition. Read "PepsiCo, Performance with Purpose, Achieving the Right Global Balance" by Rosabeth Moss Kanter, Rakesh Khurana, Rajiv Lal, and Eric Baldwin.

Building trust from failure

A new study explores the links between two important topics for top management teams: creating psychological conditions of trust and facilitating the ability for employees to learn from team failures. Abraham Carmeli, Asher Tishler, and Amy C. Edmondson describe their findings in "CEO Relational Leadership and Strategic Decision Quality in Top Management Teams: The Role of Team Trust and Learning from Failure," published in the latest issue of Strategic Organization.

 

Publications

Teaming: How Organizations Learn, Innovate, and Compete in the Knowledge Economy

Abstract

Continuous improvement, understanding complex systems, and promoting innovation are all part of the landscape of learning challenges today's companies face. I show that organizations thrive, or fail to thrive, based on how well the small groups within those organizations work. In most organizations, the work that produces value for customers is carried out by teams, and increasingly, by flexible team-like entities. The pace of change and the fluidity of most work structures mean that it's not really about creating effective teams anymore, but instead about leading effective teaming. Teaming shows that organizations learn when the flexible, fluid collaborations they encompass are able to learn. The problem is teams, and other dynamic groups, don't learn naturally. I outline the factors that prevent them from doing so, such as interpersonal fear, irrational beliefs about failure, groupthink, problematic power dynamics, and information hoarding. With Teaming, leaders can shape these factors by encouraging reflection, creating psychological safety, and overcoming defensive interpersonal dynamics that inhibit the sharing of ideas. Further, they can use practical management strategies to help organizations realize the benefits inherent in both success and failure. Based on years of research, this book shows how leaders can make organizational learning happen by building teams that learn.

Publisher's Link: http://www.wiley.com/WileyCDA/WileyTitle/productCd-078797093X.html

The Gifts We Keep on Giving: Documenting and Destigmatizing the Regifting Taboo

Abstract

Five studies investigate whether the practice of "regifting"-a social taboo-is as offensive to givers as regifters assume. Participants who imagined regifting thought that the original givers would be more offended than givers reported feeling, to such an extent that receivers viewed regifting as similar in offensiveness to throwing gifts away (whereas givers clearly preferred the former). This asymmetry in emotional reactions to regifting was driven by an asymmetry in beliefs about entitlement. Givers believed that the act of gift giving passed "title" to the gift on to receivers-such that receivers were free to decide what to do with the gift; in contrast, receivers believed that givers retained some "say" in how their gifts were used. Finally, an intervention designed to destigmatize regifting by introducing a different normative standard (i.e., National Regifting Day) corrected the asymmetry in beliefs about entitlement and increased regifting.

Read the paper: http://www.people.hbs.edu/mnorton/adams flynn norton.pdf

Creating a Sustainable Society through Integrated Reporting Delivered via Cloud Computing

An abstract is unavailable at this time.

Publisher's Link: http://www.europeanbusinessreview.com/?p=5748

Assent-maximizing Social Choice

Abstract

We take a decision theoretic approach to the classic social choice problem, using data on the frequency of choice problems to compute social choice functions. We define a family of social choice rules that depend on the population's preferences and on the probability distribution over the sets of feasible alternatives that the society will face. Our methods generalize the well-known Kemeny Rule. In the Kemeny Rule, it is known a priori that the subset of feasible alternatives will be a pair. We define a distinct social choice function for each distribution over the feasible subsets. Our rules can be interpreted as distance minimization-selecting the order closest to the population's preferences, using a metric on the orders that reflects the distribution over the possible feasible sets. The distance is the probability that two orders will disagree about the optimal choice from a randomly selected available set. We provide an algorithmic method to compute these metrics in the case where the probability of a given feasible set is a function only of its cardinality.

The Pot Calling the Kettle Black: Contrast Response to Ethical Dissonance

Abstract

Six studies demonstrate the "pot calling the kettle black" phenomenon whereby people are guilty of the very fault they identify in others. Recalling an undeniable ethical failure, people experience ethical dissonance between their moral values and their behavioral misconduct. Our findings indicate that to reduce ethical dissonance, individuals use a double-distancing mechanism. Using an overcompensating ethical code, they judge others more harshly and present themselves as more virtuous and ethical (Studies 1, 2, 3). We show this mechanism is exclusive for ethical dissonance and is not triggered by salience of ethicality (Study 4), general sense of personal failure, or ethically neutral cognitive dissonance (Study 5). Finally, it is characterized by some boundary conditions (Study 6). We discuss the theoretical contribution of this work to research on moral regulation and ethical behavior.

"CEO Relational Leadership and Strategic Decision Quality in Top Management Teams: The Role of Team Trust and Learning from Failure

Abstract

In this study, we examine a complex pathway through which CEOs, who exhibit relational leadership, may improve the quality of strategic decisions of their top management teams (TMTs) by creating psychological conditions of trust and facilitating learning from failures in their teams. Structural equation modeling (SEM) analyses of survey data collected from 77 TMTs indicate that the relationship between CEO relational leadership and team learning from failures was mediated by trust between TMT members; and team learning from failures mediated the relationship between team trust and strategic decision quality. Supplemented by qualitative data from two TMTs, these findings suggest that CEOs can improve the quality of strategic decisions their TMTs make by shaping a relational context of trust and facilitating learning from failures.

Book:

Enacting Our Field

Abstract

This keynote address, delivered to the Nonprofit Academic Centers Council at its 25-year "benchmark" conference, examines the pedagogical challenges facing the field of nonprofit management in American higher education. It interrogates four binary distinctions commonly used in scholarship and teaching about the social sector, but which now show signs of eroding: for-profit versus nonprofit, funder versus grantee, local versus global, and secular versus faith-based. Each distinction is examined with the aim of answering two questions: What are the implications for new theorizing about this field? What are the implications for teaching and action? In closing, the essay explores innovations in structuring social sector management programs in order to educate cross-sector leaders capable of addressing critical societal problems.

Organizational Errors: Directions for Future Research

Abstract

The goal of this paper is to promote research about organizational errors-i.e., the actions of multiple organizational participants that deviate from organizationally specified rules and can potentially result in adverse organizational outcomes. To that end, we advance the premise that organizational errors merit study in their own right as an organizational-level phenomenon of growing theoretical and managerial significance. We delineate organizational errors as a construct that is distinct from but related to individual-level errors and draw attention to its multi-level antecedents, mediating processes, and outcomes. We also discuss error management processes such as prevention, resilience, and learning and call for research to expand our currently limited understanding of how these processes unfold over time, i.e., before, during, and after the occurrence of organizational errors. Further, in the light of a recurring critique of prior error-related organizational studies as being narrowly context-bound and therefore of limited interest to organizational researchers in general, we elaborate on the critical need for future research to explicitly take into account the role of contextual features. We conclude with a discussion of key themes, unresolved issues, and promising research directions.

Effects of Description of Options on Parental Perinatal Decision-Making

Abstract

Objective: To examine whether parents' delivery room management decisions for extremely preterm infants are influenced by (a) the degree of detail with which options-comfort care (CC) or intensive care (IC)-are presented or (b) their order of presentation. Methods: 309 volunteers, 18-55 years old, were each randomized to one of 4 groups: 1. detailed descriptions, CC presented first; 2. detailed descriptions, IC presented first; 3. brief descriptions, CC presented first; and 4. brief descriptions, IC presented first. Each received the description of a hypothetical delivery of a 23-week gestation infant and chose either IC or CC. Open-ended and structured questions elicited reasoning. Data were analyzed by chi-square and logistic regression analysis. Results: Neither degree of detail, comparing groups 1+2 with 3+4 (37% v 41%, OR=0.85, 95%CI=0.54-1.34, p=0.48), nor order, comparing groups 1+3 with 2+4 (40% v 37 %, OR=0.88, 95%CI=0.56-1.39; p=0.59), influenced the likelihood of choosing IC. Participants choosing IC were more likely to invoke sanctity of life and religiosity as personal values. Additional reasons for choosing IC were experiences with infants born at later gestational ages, giving the baby a chance, not watching their baby die, and equating CC with euthanasia. Some choosing CC wanted to avoid infant suffering. Conclusions: The degree of detail and order of presentation had no effect on treatment decisions, suggesting that individuals bring well-articulated preexisting preferences to such decisions. Understanding beliefs and attitudes motivating these preferences can assist physicians in helping parents make informed decisions consistent with their values.

Consumer-Driven Health Care: Conquering Health Care Cost and Quality Demons

An abstract is unavailable at this time.

Publisher's Link: http://www.worldscibooks.com/economics/8336.html

Managing Your Boss

An abstract is unavailable at this time.

Purchase the book: http://hbr.org/product/guide-to-managing-up-and-across/an/11126-PDF-ENG

Empirical Observations on Incentives for Weight Loss

Abstract

Behavioral economic-based interventions are emerging as powerful tools to help individuals accomplish their own goals, including weight loss. Deposit contract incentive systems give participants the opportunity to put their money down toward losing weight, which they forfeit if they fail to lose weight; lottery incentive systems enable participants to win money if they attain weight loss goals. In this paper, we pool data from two prior studies to examine a variety of issues that unpublished data from those studies allow us to address. First, examining data from the deposit contract treatments in greater depth, we investigate factors affecting deposit frequency and size and discuss possible ways of increasing deposits. Next, we compare the effectiveness of both deposit contract and lottery interventions as a function of participant demographic characteristics. These observations may help to guide the design of future, longer-term, behavioral economic-based interventions.

Herbert A. Simon on What Ails Business Schools: More than a Problem in Organizational Design

Abstract

We critically examine Herbert Simon's 1967 essay, "The Business School: A Problem in Organizational Design." We consider this essay within the context of Simon's key ideas about organizations, particularly those closely associated with the 'Carnegie perspective' on organizations, and how they influenced the reinvention of American business schools in the post-WWII era, were deeply influenced by the post-War context, and also were appropriated by the Ford and Carnegie Foundations to reform business school teaching and research. We argue that management educators misappropriated Simon's concept of an intellectually robust and relevant research and educational agenda for business schools that has in part contributed to the intellectual stasis that now characterizes business education research and its capacity to inform management practice.

 

Working Papers

Breaking Them In or Revealing Their Best? Reframing Socialization around Newcomer Self-Expression

Abstract

Socialization theory has focused on enculturating new employees such that they develop pride in their new organization and internalize its values. Drawing on authenticity research, we propose that socialization leads to more effective employment relationships when it starts with newcomers expressing their personal identities. In a field experiment carried out in a large business process outsourcing company, we found that socialization focused on personal identity (emphasizing newcomers' unique perspectives and strengths) led to significantly greater customer satisfaction and greater employee retention after six months, compared to (a) socialization that focused on organizational identity (emphasizing pride from organizational affiliation) and (b) the organization's traditional approach, which focused primarily on skills training. To confirm causation and explore the mechanisms underlying the effects, we replicated the results in a laboratory experiment. We found that individuals working temporarily as part of a research team were more engaged and satisfied with their work, performed their tasks more effectively, and were also more likely to return to work when initial socialization focused on personal rather than organizational identity. In addition, authentic self-expression mediated these relationships. We call for a new direction in socialization theory examining how both organizations and employees benefit by encouraging authentic self-expression.

Download the paper: http://www.hbs.edu/research/pdf/12-067.pdf

Platform Competition under Partial Belief Advantage

Abstract

This paper considers platform competition in a two-sided market that includes buyers and sellers. One of the platforms benefits from a partial belief advantage, in that each side believes that it is more likely that the other side will join the advantaged platform. We find that the degree of the platform's belief advantage affects its decision regarding the business model (i.e., whether to subsidize buyers or sellers), the access fees, and the size of the platform. A slight increase in the platform's belief advantage may induce the advantaged platform to switch from subsidizing sellers to subsidizing buyers, or induce the disadvantaged platform to switch from subsidizing buyers to subsidizing sellers.

Download the paper: http://www.hbs.edu/research/pdf/12-066.pdf

The Architecture of Transaction Networks: A Comparative Analysis of Hierarchy in Two Sectors

Abstract

Many products are manufactured in networks of firms linked by transactions, but comparatively little is known about how or why such transaction networks differ. This paper investigates the transaction networks of two large sectors in Japan at a single point in time. In characterizing these networks, our primary measure is "hierarchy," defined as the degree to which transactions flow in one direction, from "upstream" to "downstream." Our empirical results show that the electronics sector exhibits a much lower degree of hierarchy than the automotive sector because of the presence of numerous inter-firm transaction cycles. These cycles, in turn, reveal that a significant group of firms have two-way "vertically permeable boundaries": (1) they participate in multiple stages of an industry's value chain, hence are vertically integrated, but also (2) they allow both downstream units to purchase intermediate inputs from and upstream units to sell intermediate goods to other sector firms. We demonstrate that the 10 largest electronics firms had two-way vertically permeable boundaries while almost no firms in the automotive sector had adopted that practice.

Download the paper: http://www.hbs.edu/research/pdf/11-076.pdf

Emergent Design: Creating a New Business in a Nascent Industry

Abstract

This paper reports on a field study of the founding of a new company in a nascent industry. We examine how the company's founders, facing the high ambiguity inherent in very early phases of a new industry, developed an idea for a new venture. Our qualitative data reveal the company's founding as a social, integrative process that unfolded through a series of collaborative, ad-hoc interactions. By aggregating previously identified problems in several existing industries, the founders articulated an innovative idea for a new venture in a nascent industry. The seeds of the new venture existed in the company's founders' disparate beliefs about actionable problems, but the idea that formed the venture was an innovative integration of these problems. We develop a process model that explains how, under conditions of ambiguity, new businesses can take shape through emergent design: a collaborative social exchange that resembles the innovation process. We identify three factors-psychological safety, cognitive flexibility, and psychological ownership-that enable the three steps that comprise this process. By illuminating the formation process of an entrepreneurial organization, we contribute to organizational literatures on entrepreneurship, collective decision making, and innovation.

Download the paper: http://www.hbs.edu/research/pdf/11-099.pdf

 

Cases & Course Materials

Doug Rauch: Solving the American Food Paradox

José B. Alvarez and Ryan Johnson
Harvard Business School Case 512-022

Doug Rauch, the former president of grocery store chain Trader Joe's, had long been troubled by the amount of food, especially fresh and healthy produce, that was wasted in the food system. Simultaneously, he was frustrated by the paradox he saw in the U.S. food system: rising food insecurity, broadly defined as a lack of access to enough food to fully meet basic needs at all times, concurrent with an obesity epidemic, suggesting that low-income communities lacked access not just to food in general, but to healthy foods in particular. Rauch believed he could build a non-profit grocery store model that took advantage of grocery stores' built-in waste and channeled that wasted food to be resold at a significant discount. Rauch faced significant challenges in the implementation and execution of his plan, notably legal hurdles related to selling products past their expiration date, marketing challenges, and convincing grocers to partner with him to combat waste. He had to carefully select a partner from a number of interested parties. Finally, he would need to change shopping, eating, and cooking behaviors of a community. In doing so, he hoped to leave a lasting positive health impact and a scalable model for change across the United States.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/512022-PDF-ENG

Marine Harvest: Leading Salmon Aquaculture

David E. Bell and Ryan Johnson
Harvard Business School Case 512-042

Marine Harvest has the leading position in salmon aquaculture. Aquaculture is very much a growth business, many believing it could play a major role in solving the world's growing need for protein. The CEO is considering three alternatives for taking advantage of his firm's dominant position. Expand production in Chile, produce value-added salmon products, or backward-integrate into the salmon feed business.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/512042-PDF-ENG

Airbnb (A)

Benjamin Edelman and Michael Luca
Harvard Business School Case 912-019

After widely publicized complaints of destructive guests and unreliable hosts, online apartment rental site Airbnb explores mechanisms to facilitate trust between guests and hosts. Flexible online reputation systems can collect and share information with ease, but Airbnb must decide which information guests and hosts should have to provide and how much flexibility each should have in selecting who to do business with. A full-featured system could provide all the information users have been requesting, but would it be too complicated for routine use?

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/912019-PDF-ENG

Purchase this supplement(B):
http://cb.hbsp.harvard.edu/cb/product/912020-PDF-ENG

PepsiCo, Performance with Purpose, Achieving the Right Global Balance

Rosabeth Moss Kanter, Rakesh Khurana, Rajiv Lal, and Eric Baldwin
Harvard Business School Case 412-079

This case explores a shift in strategic direction at PepsiCo, the second-largest food and beverage company in the world. It concentrates on the formation of a new group, the Global Nutrition Group, whose purpose was to bring focus to the company's efforts to significantly expand its offerings in nutritious food and beverages. The case explores the background to that decision and the complexities the company faced in altering its product portfolio over the long run (which also included efforts to make its core snack and soft drink products healthier), while at the same time maintaining short-term profitability. The evolution of the product portfolio was part of a larger effort to implement a new strategic vision, encapsulated in the phrase, "Performance with Purpose." The phrase, in brief, expressed a commitment to deliver financial results in a way that was good for the world as well as good for the company.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/412079-PDF-ENG

Banco Ciudad (A): Who Is the Owner?

Aldo Musacchio, Gustavo A. Herrero, and Cintra Scott
Harvard Business School Case 712-029

The state-run Banco de la Ciudad de Buenos Aires (Banco Ciudad) was losing money in 2007. Early in 2008, Federico Sturzenegger, a renowned academic in Argentina, was appointed executive chairman by the city government and charged with turning the bank around. But just four months later, Sturzenegger was already facing the 45th day of a labor conflict sparked by union representatives on account of having fired six employees. The showdown raised several questions. First and foremost: Who owned Banco Ciudad? The city government? The citizens? Its employees? How could this bank use its strengths and overcome its weaknesses to best serve its constituents and the public? This case follows Sturzenegger´s eventful first few years in office to examine how a state-owned enterprise maneuvered in a challenging environment to hit its targets of greater efficiency and profitability.

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/712029-PDF-ENG

Banco Ciudad (B): Transformation at Work?

Aldo Musacchio, Gustavo A. Herrero, and Cintra Scott
Harvard Business School Case 712-030

Returning to Banco Ciudad two years after executive chairman Federico Sturzenegger´s decision to "think outside of the box" to turn the institution around, this case tracks profitability and other metrics of success for the state-owned bank. The case ends with Sturzenegger asking: where can he take the bank next?

Purchase this case:
http://cb.hbsp.harvard.edu/cb/product/712030-PDF-ENG